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StumbleSUN EDITORIAL:
Helping the economy
Obama’s plans for highway spending and tax deductions would create jobs
Wednesday, Sept. 8, 2010 | 2:01 a.m.
In a Labor Day address before union workers in Milwaukee, President Barack Obama acknowledged what Republicans in Congress have been too afraid to admit — that the shattered economy he inherited when he took office could not be mended quickly. Obama stepped into the Oval Office facing catastrophic marketplace failures in housing and finance.
Thanks to his predecessors in the Bush administration, greedy Wall Street companies ran amok in an unregulated environment. Meanwhile, nothing was being done to protect America’s working class.
Years of reckless mismanagement in Washington cannot be changed overnight, which helps explain why it has been so difficult to turn the economy around. The carnage, as Obama stated, is reflected in the fact that nearly 1 in 5 construction workers is unemployed.
“It doesn’t do anybody any good when so many hardworking Americans have been idled for months, even years, at a time when there is so much of America that needs rebuilding,” he said.
With that in mind, the president proposed that Congress approve $50 billion in new spending to shore up the nation’s roads, railways and airport runways. He also made a pitch for an infrastructure bank that would help finance projects based on economic need rather than on geography or politics, which is the way many transportation funds are allocated now.
But the president is not stopping there. Fully aware that more should be done to stimulate the economy, Obama is also proposing that businesses be allowed to take tax deductions on the full value of new equipment purchases through next year. As reported by The New York Times, those deductions would give companies more incentive to spend and invest.
One thing the infrastructure financing and tax deduction plans have in common — and why they should be approved — is that both would create jobs, the key to a sustainable economic recovery.
Another thing the proposals have in common is that they come from a president who obviously recognizes that the federal government should do more to help struggling Americans stay afloat. He and fellow Democrats in Congress have consistently proposed the legislation necessary to repair failed markets and give working-class wage earners a fighting chance to help turn the economy around.
At every step along this path, though, the Obama administration and Democrats in Congress have faced obstruction from selfish congressional Republicans who insist on helping only those special interests that drove the economy into the ditch. Nevadans, faced with the nation’s highest unemployment rate, have been particularly hard hit due to the Republicans’ intransigence.
House Republican leader John Boehner of Ohio said Monday: “If we’ve learned anything from the past 18 months, it’s that we can’t spend our way to prosperity.” Actually, what we’ve learned from the past 18 months is that Boehner and fellow Republicans don’t have any concrete solutions to help the economy or the working class. If they had, we surely would have heard them by now. That’s something Americans should keep in mind when voting in November’s elections.
Discussion: 16 comments so far…
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Would all the construction financed by the federal government require the jobs ONLY go to the 12% of workers in America that are union members? Or do they allow anyone to bid, win and prosper?
Is this an investment in America or Big Labor at America's expense?
Cut taxs , deregulate , and bash unions, ain't that how we got here ?
Payoff to unions, did author forget to mention PLAs? Another example of ripping off the taxpayer.
Gee, I think Hitler did this too. I agree with Neiman, who exactly is going to be doing this work, union shops who no longer bother to check the legal status of their members therefore allowing illegals to benefit from these jobs? This is just another vote buying scheme by Democrats and the voters should keep that in mind come the November elections.
Cut taxs , deregulate , and bash unions, ain't that how we got here ?
__________
Well no, not exactly.
The sad facts are:
1. As things are, $50 Billion isn't enough to make a significant dent in the widespread unemployment and underemployment.
2. Unless and until we make a significant dent in unemployment and underemployment, we will not have enough consumption of consumer or industrial products to justify significant new placements of capital equipment. So, while we would get some benefit from the proposed tax break because we can replace old pieces of machinery and equipment with newer, and presumably more efficient ones, (a) a lot of this money will flow overseas (because we don't make many of these things here any more), (b) we have too much underused plant and equipment capacity as it is. (c)nothing is operating to increase consumption, which means that the new stuff will be as underutilized as the old, (d) we move away from a balanced budget now, but can't realistically hope to get much increased revenue in the future -- or to put it another way, we would not be priming the pump but just wasting water.
I'm beginning to think that our very bright, highly educated, basically decent and humanitarian President has the same problem as the last very bright, highly educated, basically decent and humanitarian President we had: he has been carefully taught by the established experts what can't be done. Accordingly, he will only do things which are safe, sound, and justified by sufficient evidence and established by experience. History shows that Mr. Herbert Hoover was a very useful man who did much that was right. But he could not bring himself to try the things necessary to bring us out of the Great Depression.
Before the Editors jump into this swamp--a new Freddie Mac and Fannie Mae--they should take a quick look at Michelle Malkin's comments:
http://michellemalkin.com/
lericgoodman:
I am inclined to agree with you that there is no FDR in Obama. Your critique of Obama and his strategies on governance were the most fair attack on Obama I have seen.
That being relatively agreed upon, do you think the members of the American Taliban, such as McCain, Boehner, McConnell, Palin, Rove, etc. should be anywhere near the drivers seat?
elyboy:
Michelle Malkin has the credibility of a gnat. She is another member of the American Taliban that uses fear and lies to subvert our country.
In your American Taliban circles I am sure she is a high Priestess, but in the real world she is woefully undereducated to speak on virtually any topic. She's a walking talking paid political operative for the American Taliban.
Couldn't obama just mail out checks to all of us?
That would be far more efficient use of the borrowed funds... And we would actually get something for it.
lericgoodman; you speak the truth ; I'm starting to believe that Obama is no FDR too. Perhaps he's an educated Al Smith. I really hope he abandons trickle down economics.People like Summers really ought to retire.
FDR proved it, Obama is proving it again. The federal government has absolutely no idea how to stimulate the economy. They spend other peoples money with gleeful abandon while wearing somber faces. If they do know the answer, and they should by now, then they are criminal in their actions.
Cut taxes, Cut Regulation, and Cut spending. This has worked every time it was done. But it requires a government that will relinquish control to the people, and currently the government is unwilling to do just that.
The rigid regulations are causing an inflexibility an economy that must remain flexible, this will cause the economy to falter and crash.
Jeff, don't let facts hit you in the face. Other than name-calling you don't realy have much to say, do you?
Good article on how we "desperately" need more government. Enjoy the "inherited thing"
http://www.usatoday.com/news/washington/...
It is funny that when the stimulus bill was passed a year and a half ago, we were told that it was going to be spent largely on infrastructure. Today we are being told that we need need to pass additional spending in infrastructure despite the fact that $275B of the previous stimulus is unspent. We do need to invest in infrastructure but we do not seem to be doing it. If you assume that we got into this infrastructure deficit started on Bush, it is nearly $300B a year in underspending. With our deficit, where do we get the money to fix that? We need people that focus on the real problems we are facing. One of the things that we need from our government is figuring out how to get private business to create jobs. So far we have not done that and so we are still in the hole.
Rusty57:
If you would like to distance yourself from the American Taliban, do so now.
Looking at the USA as a family we have family meetings, and a lot of the family is hungry. We have 12 kids and enough food for 8 of us to eat. You guys, being the oldest 4 kids refuse to share your food with your 4 siblings that are starving.
We, the middle 4 kids, are sharing our food with the 4 starving siblings, which means we are hungry too. We try to get you to share some of your wealth because you are well fed, have had years to accumulate it, and instead you refuse to hire your four youngest siblings, instead you pay the Chinese families a pittance of what it takes to feed your siblings that are ready to work, able to work, and need to work.
We have family rules that any one of us can block the spending of family money, now dad (the president) can spend some of it, like for guns and can buy a loaf of white bread and water for the 4 youngest so they don't die (funerals are expensive). For almost 2 years now the four fat and happy kids have said no to spending a penny that does not directly benefit them, and now they want to give the four youngest up for adoption.
This is your party Rusty57. I don't have time to rebut your sides idiocy at every turn because the sheer magnitude of the stupidity is so high that all that is left is to tell you that you are a disease on the the American family.
We can now look back at the economic numbers and see that the economy turned around BEFORE Obama took office, though unemployment trailed by a few months as it always does. By March 15, 2009 the Obama Administration reported seeing the "green shoots" of an economic recovery. This was before the first dollar of Obama's 'stimulus' had been spent. By June, 2009, the economy actually recorded positive GDP growth. Again this was before any 'stimulus' funds had reached the economy.
The graph in this article http://www.americanthinker.com/2010/09/t...
shows clearly that the economy turned around before Obama took office, and 'stimulus' didn't 'stimulate.'
When Republicans complained about all the wasteful spending, before the 'stimulus' passed, Obama said, "What do they think a stimulus is?"
Well, Republicans think stimulus is removing roadblocks preventing small business from expanding. We think stimulus is providing confidence that the future business environment won't be even worse than it is today. We think stimulus is reassuring business risk takers that government, which is financed completely by skimming money from private enterprise, will not continue to grow to become even more wasteful, more unmanageable, more inefficient, and more ineffective, than it is now.
ah good olde trickle down economics - give the unions a tax break and the money will trickle down to the rest of us...
As for the rest, the Las Vegas Sun editorial board needs to get real. An unregulated economic market? Have you guys heard of the SEC or the Federal Reserve? Seriously guys, read the newspaper. :P
"Would all the construction financed by the federal government require the jobs ONLY go to the 12% of workers in America that are union members? Or do they allow anyone to bid, win and prosper?"
The Davis-Bacon Act requires that all federal contracts be at the prevailing wage, which invariably means the union wage, and, thus, union workers.
"1. As things are, $50 Billion isn't enough to make a significant dent in the widespread unemployment and underemployment."
Contrary to this suggestion, the government cannot hire us out of this recession. The money has to come from somewhere, and that invariably means out of the private sector, which is much more efficient than the government at allocating resources. Trying to hire our way out of a recession is a sure-fired way to deepen it.
"2. Unless and until we make a significant dent in unemployment and underemployment, we will not have enough consumption of consumer or industrial products to justify significant new placements of capital equipment."
Again, the much discredited Keynesian assumptions. There is, in fact, not a lack of demand right now (and even if there were, Keynesian stimulus would still not work).
The borrowing for all the government spending we have already seen has crowded out the investment needed for expansion of businesses. The reality is that much of business growth is financed by borrowing, and not, at least entirely, internally.
If you talk to very many small business owners, one of their big complaints these days is their inability to borrow money to run or expand their businesses. Long standing lines of credit have been canceled, regardless of payment history. And little new money is available.
I should add that the recently enacted financial "reforms" just passed into law aggravate this problem by significantly raising the costs of doing business for medium and small banks (while essentially leaving the target of the "reforms", the biggest financial institutions, alone).
"Years of reckless mismanagement in Washington cannot be changed overnight, which helps explain why it has been so difficult to turn the economy around. The carnage, as Obama stated, is reflected in the fact that nearly 1 in 5 construction workers is unemployed."
The author quotes the President and the Administration uncritically, as if they spoke truth, instead of spin.
Obama is still blaming Bush, despite his own actions being the primary cause right now for the deepened recession. Remember, he was also a member of the Senate majority during the last two years of the Bush Administration, and since spending is authorized by Congress, is as responsible as Bush was for any spending during that time.
But more importantly, he hasn't done anything since coming into office to help the economy, and plenty to hurt it, including his almost trillion dollar Keynesian "stimulus" plan, screwing senior creditors when taking over GM and Chrysler, health care "reform", the financial "reform" bill, and the list goes on. Not a one of those actions has helped the economy recover, and most have hindered it.
I thought the first stimulus package was supposed to do this?
In any event, if Obama is going to do this, then he needs to spend the money ONLY on projects that can use as close to 100% US natural resources as possible. That will spur far more jobs than his tax credit for equipment. Build those roads, bridges and power grids with US steel and concrete. Dollars spent on overseas materials do nothing to help us.
And put E-verify in it! The House had put E-verify in the first package, but Reid stripped it out. Remember that in November, union workers.
Jeff, i'm sure you don't have much else to do. Nice sunday school fable though. And squandering taxpayer dollars to payoff a political constituency is a favorite pastime of the Dims.
It just got relabeled as "stimulus" this time.
It's very, very funny...The closer we get to November 2nd, the more the right-wingers rant and rant against Obama...
Hmmmm....I wonder if that increased rant is directly connected to the fear that those on the right have concerning how the November election will all pan out?
I predict we will see a lot of attempts at suicide from those sleeping over on the right if the Democrats maintain control of both the House and the Senate.....
Despite what the typical right winger will tell you, the economy is slowly getting better.
The inept and clueless leadership of the Bush Administration literally drove the economic bus into a very large ditch.
The Obama Administration now has the bus (economy) out of the ditch, but much needed repairs must be done to the engine of the bus.
Only then will the bus (economy) be able to move down the global highway under its own power....
Thank you George W. Bush....Thank you Dick Cheney. You guys really know how to wreck a well running bus....Ha! Ha! Ha!
________________________________________________
"In terms of the economy, look, I inherited a recession, I am ending on a recession." --George W. Bush, Washington, D.C., Jan. 12, 2009
The best part of the SUN Editorial is the part that says:
"House Republican leader John Boehner of Ohio said Monday: "If we've learned anything from the past 18 months, it's that we can't spend our way to prosperity." Actually, what we've learned from the past 18 months is that Boehner and fellow Republicans don't have any concrete solutions to help the economy or the working class. If they had, we surely would have heard them by now...."
Don't you just love it? How the Republicans spend all their time ranting against the stimulus plan put together by Obama and the Democrats, but have not been able or willing to come up with a plan of their own?
The Gump guy had it right when he said:
"Stupid is as stupid does....."
Oh well, who ever said Republicans are smart?
Another Republican?
Michelle Malkin's article is very nice. Unfortunately, its based entirely on the Premise that Obama is favoring unions and so only union workers will benefit. However she misreads Executive order 13502 (cited in her article) which reads "[project labor agreements shall] allow all contractors and subcontractors to compete for contracts and subcontracts without regard to whether they are otherwise parties to collective bargaining agreements." There is no requirement under Obama that contractors use union labor. She infers that unions are favored becuase the Order does require that agreements have dispute resolution mechanism for labor disputes. This isn't a union only provision. Further the Order specifically bars strikes and other job actions. The Order doesn't even require "prevailing wage" which would be required under most state laws, including Nevada.
The problem is that you are relying on someone who is a professed conservative, one who has a policy ax to grind. And so she reads into the context that which is consistent with her perspective and supports her anti-Democratic bent.
Note that during the debate on Stimulus last year, Boehner and the other republican leadership complained that Stimulus was bad because it didnt' have enough funding for infrastructure. Now that infrastructure funding is proposed, they need to find other reasons to object.
Politics as usual.
no one has impressed me in the last 10 years since clinton left office. i miss ole bubba and thought he had our best interest at heart. sure, he lied about monica but, as all married men know, discretion is the better part of valor. the man left our country out of debt and in the clover.
clinton was better than your boy bush and was never impeached although the lying republicans tried.
Clinton was impeached, but not convicted.
"No doubt it came as a shock to many of you that weatherizing windows couldn't get a $14 trillion economy cooking again. But if an $800 billion infusion of government and union bailouts failed to spur any decent economic growth, then how is a new "piecemeal" $50 billion stimulus going to work out?"
http://reason.com/archives/2010/09/08/ca...
bhayden said "Obama is still blaming Bush, despite his own actions being the primary cause right now for the deepened recession." At the risk of being criticized for point out the actual facts, I do need to point out 2 things to you.
First, the recession is, technically speaking, over because GDP has been growing for going on 5 consecutive quarters. If you look at the history of recessions,unemployment has always been a "trailing indicator". It has always taken roughly 5 to 6 years for unemployment to drop to pre-recession levels after the GDP growth turns positive. (BLS stats on unemployment are customizable at http://data.bls.gov/PDQ/servlet/SurveyOu...), While this is clearly not good news for those that are unemployed, no one, neither democrat, nor republican has ever brough double digit unemployment back to 6% in less time. Anyone who thinks there is an easy answer should be willing to share whatever it is they are smoking.
The other is that, despite my agreement that spending does need to be brought under control, the recession was not caused by spending, whether Obama as part of the majority in 2007 approved the spending or not. The recession was caused by the collapse of the housing market, the ensuing collapse of the construction industry and ripple effects on a wide range of sectors in the economy. While wall street and the so-called financial services industry share in the blame for that, the real villian is Bush and regulations his HUD department issued in 2004 requiring Fanny and Freddie to greatly expand the subprime loans that were issued. This was done in furtherance of his expressed policy to favor universal home ownership to be brought about by increasing the availability of zero and low down paymnet loans for lower income people. As a result of those regulations, during 2004 and 2005, Freddie and Fannie funded, both directly and indirectly, more than 3 times as much in subprime paper and CDO's as in the last 4 years of Clinton combined. This led to the overheated housing market bubble and eventual collapse. (Tulips anyone?)
gbigs said "Bubba Clinton hiked taxes a record amount. and lost congress in 94." Yes and that tax hike was followed by decreasing deficits and falling unemployment. So much for your intuitive guesses about what works for the economy.
Recessions aren't caused by spending or tax increases, although the 1937-38 recession was probably caused by a 25% spending reduction. Recessions are cause by bubble's bursting and the ensuing ripple effect, whether it is the auto industry in 1981, the dot com collaplse in 2001 or the housing bubble in 2007-08. Everyone on here knows the current issues developed from the housing bubble and anyone who is willing to be objective knows that the bubble was caused by Bush's HUD regulations and wall street aggressive packaging of the resulting mortgages into CDO's that cause the housing market to overheat. The rest is just political rhetoric.
I again challenge you to identify any policy with a track record of bringing unemployment down from 10% to 6% in less than 5 years. I believe it has NEVER happened but you obviously enjoy Obama's failure to do that which has never been done by either party. TTYS
"This was done in furtherance of his [Bush's] expressed policy to favor universal home ownership to be brought about by increasing the availability of zero and low down paymnet loans for lower income people." - hss46
Did any Democrat oppose this policy? Is it not taken directly from the the Democrats' own platform and FDR's "Second Bill of Rights"?
That policy was indicative of what I see is the major flaw in most government plans to help the lower classes. They don't address the real problem but only treat the symptoms.
In this case, the real cause was the ever-increasing price of homes thanks to a speculation bubble. The fix would have been to stop that bubble and bring home prices down to an affordable level.
We see the exact same failure in health care. The problem is not the cost of coverage, but the cost of the care itself. Fix THAT and the coverage question can be addressed in a more intelligent manner.
This latest proposal from Obama is doomed to failure as well. IT'S THE JOBS, STUPID!
Tax credits won't create jobs. Massive government purchases of American goods at least has a chance to create demand that will require more hiring.
I find it surreal most of this issue is really about accounting rules and has little if anything to do with what most think.
US should copy Germany: http://www.cato.org/pub_display.php?pub_...
Old neo liberals use to get this (I miss them) http://www.pbs.org/wgbh/commandingheight...
boftx:
In 2004 when the HUD regs led to the bubble, the republicans controlled congress. The issue is not FDR's second bill of rights which said nothing about home ownership, but even if it did, the problem was getting there through low/no down payment with bad credit, creating overwhelming demand for what was then a limited supply.
As to health care, you're damn right that the the cost of is part of the problem. But so is the "mark up" by the insurance companies. Medicare has a 3% admin factor and most private carriers have 18%+ for admin and profit.
While I don't predict that $50B for infrastucture is "THE SOLUTION", we do need the infrastructure work done to avoid longer term problems and the $50 will help put more money into consummer's hands and therefore can't hurt. And paying for it by closing oil incentives is an acceptable way to pay for it without having the defict baloon.
Patrick you're doing it again. Of course Germany's fiscal restraint hasn't shown low gdp growth so far because germany didn't have any negative annual gdp growth while we were in recession and their unemployment rate has been lower than ours throught this period. And now with the fiscal restraint, European economists are predicting further drops in Germany's GDP.
You have all these neat factoids that are always pulled out of context.
Tsk tsk tsk, talk about out of context, people were suggesting they'd spiral down well before now...
more on german unemployment http://www.indexmundi.com/germany/unempl...
From http://en.wikipedia.org/wiki/Second_Bill... : "The right of every family to a decent home;"
I submit that the use of the word "home" above does in fact imply home ownership.
Be that as it may, I don't think any Democrat opposed the policy, and a look at the voting records would be interesting.
What is insulting about this new $50B proposal is that the original stimulus plan was supposed to do the same thing. Had they spent that original stimulus purely on jobs (with E-Verify) and concentrated on projects that could use mainly American resources then it might have had a chance to kick-start the economy as desired.
Again, it is my belief that the current Keynesian models do not properly take into account that the majority of goods purchased today originate overseas. Therefore the multipliers are wrong.
First of all, it should be remembered that the German slump was actually somewhat deeper than the American one. Between the first quarter of 2008 and the second quarter of 2009, GDP fell by 3.9% in the U.S. and by 4.4% in Germany*. Then in the three following quarters, U.S. growth was higher, 2.6% versus just 1.5% in Germany. Thus between the first quarter of 2008 and the first quarter of 2009, GDP fell by 1.3% in the U.S. compared to 2.9% in Germany.
http://www.csmonitor.com/Business/Stefan...
Forgive me for saying this: 1. I am an independent. 2. Rigid thinking which elevated unproven hypotheses and then obstinately followed them even as the observable facts contradicted them was what got us into this economic disaster which now threatens the foundations of American national security and, if left to fester, will pervert the American Dream into a never-ending Nightmare for Americans. At least two examples of these, still fervently advanced, are: (A) markets always allocate resources correctly. Can the proponents of this say "Housing Bubble? Or Derivatives?" Can anyone in Las Vegas still say "Build it and they will come" with a straight face? Markets allocate efficiently when other things are equal and the economy is at or near a stable equilibrium. But now things are not equal and unfortunately we do not seem to be at or anywhere near a stable equilibrium. I hope I'm wrong, but it seems as though we still have a long way to go. (B) We can restore prosperity by cutting taxes. Maybe -- if we didn't have to also finance a war. However, the combination of the Bush tax cuts and having to finance the war in Iraq established that cutting taxes while waging war would lead to skyrocketing deficits and a Capital Crisis of which the Housing Crisis is only a small part. So, are the "Republicans" going to preside over America's surrender in the war on terror? Are "Republicans" going to let bin Ladin emerge from his cave victorious? If the war continues, the "Republican" tax cuts will just throw the American economy off the cliff -- again. Who in their right mind would want to go back to an economy in endless free fall?
We are caught between the devil and the deep blue sea. Thanks to the Two Party System, we can chose between (i) not getting enough of the right things done or (ii) doing the wrong things and converting the Great Recession into Great Depression II that makes GDI look like a minor bump in the road.
Patrick:
Exactly your cited graph shows that unemployment dropped before the affirmative fiscal restraint went into effect. And the "fiscal restraint" you and CATO laud turns out to be a silly label since, as restrained, Germany's government spends over 43% of its GDP while we are under 25%. ANy more silly factoids you want to share.
hss46 needs a refresher about the housing crisis and his Bush Deranged Syndrome. Remember, whenever F&F reform was attempted the Dims played the race card.
"What They Said About Fan and Fred"
http://online.wsj.com/article/SB12229057...
Saw the entire Obama campaign speech today and am utterly amazed at the stupidity of what he said.
Any supposed attempt at a bipartisan effort to solve some of this country's problems were completely shot down by the denigrating, repulsive and belittling speech delivered by the Mad Hatter Barack Obama. Frankly, what he has done is insure that he will get NONE of his programs through Congress after the Republicans take over the House, and perhaps, the Senate.
He has also placed the Demcorats who are on the firing line in a completely perilous position where he has called them out and demanded that they NOT vote for an extension of all tax cuts.
It was truly amazing that a "LEADER" could deliver a speech that was a blatant attempt to play class warfare and try and "divide and conquer" this nation. It was also a juvenile attempt to motivate the "have-nots" to vote against the "have's" in November - pure politics.
Thankfully, the American People are growing tired of this egomaniac and his "my way or the highway" approach to running this country with the arrogance of an Ivy League professor demeaning a petulant student in the front row.
Today's speech marked the end of the possibilities of Obama Presidency achieving ANYTHING in his second two years......
Thank God for that!!!!
oh I don't know, HSS, how about the fact that people said if they didn't increase government spending even more their economy would crash - yet it didn't....
botfx I disagree that there is such an implication although you are certainly free to draw an inference. FDR didn't just say that stuff "off the cuff". I suspect that he was a good enough, careful enough speaker that he would have said "own" if he meant it.
But even if yoiu are correct. He took no action to implement universal home ownership and Bush affirmatively did. Whether or not FDR intended it as an ultimate end, Bush clearly went about it the wrong way. When you pump up demand without the appropriate supply, you create a bubble. Voila, the bubble bursts.
something on Krugman and austerity before someone throws up a Krugman link http://mises.org/mobile/daily.aspx?Id=41...
HSS46,
Increasing home ownership was a program pushed by Democrats and Republicans both. Anyone who blames either or isn't being honest...
Please explain to me why anyone would think it appropriate for a country to raise its government expenditures from 43% of GDP? I"m sure US politicians wanted them to so as to increase world wide demand (not a bad goal) but if Germany had increased its domestic spending, they have to learn to speak Greek.
In any event what they were complaining about was that Germany has decreased its spending from 48.8% in 2006 down to just over 43% in 2009, which does risk gdp contraction. With the usual time lag for such a decrease to impact, its not clear that it won't gdp won't fall as a result of that "restraint".
And unlike the U.S. most of that spending is "social" spending which goes directly to consumers and has immediate impact on demand while we spend far more on things like "military procurement" which has a far less direct impact on demand and therefore on production.
We can argue all day about demand side vs supply side and neither of us will convince the other. Suffice it to say, no on has ever one a Nobel prize for supply side theories and even Arthur Laffer says his theories are misapplied by politicians.
Patrick:
I"m not suggesting that democrats don't favor broader home ownership. I was merely pointing out to gbigs and his ilk that blaming the current economic issues on Harry is pure political rhetoric not based on facts. I'm certainly willing to acknowledged that democrats could have argued against the HUD changes in the early part of the decade but, as the minority party, there was nothing that they could have done to stop the regs or the results before 2007 and by the time they were in control, the die was already cast.
As for Stimulus, I agree that it was structure poorly designed and a better bill would have produced some better results. Just like most complicated bills it is more a product of political sausage making than effecient implementation of a coherent policy. But at the end of the day that is our political system. Absent more centralized power, sausage is what you get.
" ...no on has ever one a Nobel prize for supply side theories..." - hss46
Hayek won the Nobel in 1974 and I don't think anyone would call him a Keynesian. :)
Hayek was a micro economist who focused on money and supply/demand signals it gave, and is the father of modern price theory. He was neither a demand side (Keynes) or a supply side economist.
And I'm not saying that supply side theory has no value but I suspect that supply side policies have their benefits in the longer term and therefore are not the kinds of policies to create short term improvements.
el Lobo writes:
"Don't you just love it? How the Republicans spend all their time ranting against the stimulus plan put together by Obama and the Democrats, but have not been able or willing to come up with a plan of their own?"
So true.
The Republican response to the huge layoffs during the Great Recession? "Don't use a stimulus!" Their ideas for resurrecting lost jobs (Bush lost more than 650,000 jobs in his last month in office)? Nothing. No ideas whatsoever.
Republicans' response to spiraling health care costs for the last 30 years? "Don't talk about reform!" Their own solution? Nothing. Zero. Nada.
Republicans' response to illegal immigration? Nothing.
Republicans' response to global warming? Do nothing.
Republicans' response to alternative energy? Invade Iraq.
Republicans' response to a spiraling national debt? Double or triple it with each Republican administration.
What a joke.
AP
American Hater,
After the Bush tax cuts in 2003 - 48 continuous months of job growth and an unemployment rate around 5% - Ain't that terrible!
Health Care Costs - Yeah, Obama's massive health care bill sure reined in those costs - premiums have gone up an average of 9% this year and are supposed to go up about the same next year! THanks, Obama/Reid/Pelosi!!!
Illegal Immigration - Republicans answer: Build the damn fence! Obama's response - stop building the damn fence! Democrats position: We'll build the damn fence when we have "Comprehensive" illegal immigration reform. Tranaslation: Amnesty. Obama on the campaign trail: I will make sure this happens in year one. Reality: The Dems won't even bring it up for a vote to save their skins.
Global Warming: No such thing. Read a copy of the Framer's Almanac - it calls for Global "Cooling" in the next ten years!
Alternative energy: Republicans - Let the private sector do it! Democrats - Tax the hell out of Americans so we can seize tax dollars and plow them into inefficient government programs to build windmills!
You're right, American Hater, those Democrats are a JOKE!!!!!
Nov. 2 - Capitalists and Parents back in charge!
P.S. - THe President's speech today will cost the Dems five house seats.
Thanks, Dems, you're making it easy!!!!
Airlines, airline pilots, ATC controllers, air travel consumer groups say the ATC should be updated. Not as good as Europe or much of Asia. The loony libertarians have caused enough death and destruction, oil spills, mine disasters and food poisoning. Don't let the Koch Bros and their front groups kill more people by jeopardising air travel safety.
Save time, fuel and money as well as improving safety, by upgrading USA ATC facilities.
hss46,
Just one point and I'll drop this part of the discussion.
From http://en.wikipedia.org/wiki/Friedrich_H... : "Hayek's work on the macroeconomic subjects of central planning, trade cycle theory, the division of knowledge, and entrepreneurial adaptation especially, differ greatly from the opinions of macroeconomic "Marshallian" economists in the tradition of John Maynard Keynes and the microeconomic "Walrasian" economists in the tradition of Abba Lerner"
I think you are brushing aside a great deal of Hayek's work, especially in political philosophy, when you say he dealt only with micro economics. His major influence among non-economists is in macro economics and his rejection of central planning.
ggws:
The tax cuts were in 2001 and were followed by 30 months of job losses.
As for projected increases in health insurance premiums, thats deceptive. OECD data says that Total Health Care costs are going up at 4%, so if premiums are going up by more than 4%, either coverage is improving or insurance companies profits are increasing.
But the wild card in this is "unreimbursed care". In 2008, the last year for CBO published numbes, the estimated cost of unreimbursed care was $35B per year. Add in a little inflation and that means hospitals would eat over $400B in the next ten years, a cost which is factored into their pricing. (And a huge portion of that is taxpayer supported at county facilities like UMC.) With Health Care Reform, the good news is that unreimbursed amount will plummet as the number of uninsured/underinsured is brought way down. The bad news is, the conservative Blue dogs insisted on deferring the effective date of mandatory coverage until 2014 so the savings won't happen for 4 years.
The dying convolutions of a failed president. Spend spend spend borrow borrow borrow and it is all Bush's fault. What a pile of poop.
gbigs;
According to BLS, there were 91M employed in January of 1981 and 107M in january of 1989. Thats an increase of 16M or around 15% ioncrease. Kennedy/Johnson started with 53M and took to 69M, also a 16M increase but percentage wise much higher at around 30%, i.e. double the rate of job growth over that 8 year period compared to Reagan. However, the unemployment rate was 7.5% when Reagan took office in 1981 climbing during the next 21 months to 10.8% in Nov of 1982 and with his tax cuts it only took until late 1987, a full 5 years, for unemployment to drop down to 6%, i.e. full employment. Under Reagan's watch there were job losses for 19 consecutive months, while under Obama, the job losses were only for 12 months. Reagan inherited a downward trend in unemployment from the last months of the Carter years so he was guiding the policy as the recession started while Obama inherited what is generally viewed to be a worse recession in full swing with jobs plummetting when he took office but he managed a shorter period of job losses.
I just don't understand this Reagan worship. His policies produced results which, in the 4 years following his tax cuts were not as good as Obama's, and that recession (whether you blame it on him or not) wasn't viewed as a "the worst recession since the great depression".
And Bush started at 132.4M jobs and ended at 133.5M so he only increased the number of jobs by 1.1M. And if you look at the entire 8 years he averaged only 133.4 jobs. I think it is safe to say that Bush's jobs record is something shy of stellar.
And while you like to point out that Bush took the Dow to 14,100, it was at 10,800 when he took office and stayed there for 5 years. The dow only spent about 2 1/2 years over that 10,800 level during his 8 years, ending at 8000 and change when he left office. On the other hand, when Clinton, he took the dow from 3300 in 1993 to 10800 when he left office, i.e. he tripled values. Reagan inherited a dow of just under 1000 and left office with it at 2200, slighly over double.
And Obama took the Dow from 6600 6 weeks into his term to 10,400 in 1 1/2 years, an increase of 60%. So its hard to say business doesn't like what he's done if you use stock values as a guide.
gbigs, I guess if you want Yucca to be a dump site you don't like Angle's policy. Her web site said ""For nearly twenty years, Sharron Angle has been in favor of Yucca Mountain, as a profitable center for reprocessing, not a nuclear landfill and dumping ground. Yucca Mountain and the Nuclear Energy industry have long been demonized and demagogued by Harry Reid. In 2005, Sharron Angle voted for a resolution rejecting Yucca mountain as a dead-end nuclear dump"
gbigs said "Wind and Solar cost far more than Coal/Oil"
This is a correct statement and I know no one urging a discontinuance of fossil fuel. What is urged is a ramp up of production capacity for alternatives as we move forward because, as supplies of fossil fuel diminish, and they will, if we have not ramped up the capacities of alternatives, we'll be left standing there with our d**k in our hands while the rest of the world sails merrily along.
TonyCrago, let's use your logic. Reagan took over the worst recession since the Depression and started putting his policies in place. Interest rates dropped from over 20% to under 7% and unemployment evaporated.
But you blame him for the mess constructed by Jimmy Carter.
That means Barack Obama has to go because he is presiding over the worst economy since Reagan and IT'S HIS FAULT!!!
Your logic, Tony.
Glad you agre that Obama is incompetent and needs to be cashiered!
Nov. 2 - Capitalists and Parents back in charge!
ggws, the recession started several quarters after Reagan took office, he had nothing to do with lowering interest rates as that was handled by the Fed under a Carter appointee. Further, Reagan took much longer than Obama to lower unemployment and it wasn't as bad a recession as the Bush recession that Obama is dealing with and Reagan doubled the national debt doing it. But you are right that this is "the worst economy since Reagan" but it was inherited by Obama and Reagans' recession started after he was in office.
And lets not forget that Reagan signed TEFRA in 1982 which unwound most of the 1981 tax cuts and was one of the largest tax increases in US history. And in reference to Reagan's claim he wanted to reduced government spending David Stockman his Budget Director referred to "the Administration's failure to identify management savings and its resistance to defense spending cuts as the key impediments to greater outlay savings." So Reagan used high levels of expenditures and tax increases to solve the recession while doubling the debt. (Obama's 2010 deficit is only 5% higher than the last Bush deficit.)
Can we stop with this mythological deification of Reagan.
I wonder if the editors even bothered to look into the details of this plan before publishing this editorial?
Short on details and shallow on analysis. Who gets what and how much of the $50 billion between road, rails and airports? (why do airports need the money with all they take from me and the air carriers?)
@gbigs:
The paper has better days than others with the posts. A bunch of us were tossed on day for writing political comments on the article about Shelley Berkeley visiting the pawn shop. (I observed it was a good place to meet constituents feeling the effects of the economy and was censored for the comment)
I have no problem with infrastructure investments as a concept, but I have no idea about the details the President is proposing and for what types of projects. Highways to no where and bridges to no where should not be on the agenda. I think more should be known before anyone jumps on the band wagon from a position of ignorance rather than informed choice. There is little indication of the latter in this editorial.
President Reagan inherited a National Debt from Carter of $908 Billions, when he left office the ND was $2.6 Trillions--increase of 186%.
Bush Sr. inherited that debt and ran the ND up to 4.2 Trillions--increase of 62%
Clinton inherited that debt and ran the ND up to $5.7 Trillions--increase of 36%
bush jr. inherited that debt and ran the ND up to $12 Trillions--increase of 98%
Presently the ND stands at $13,443,572,162,781
So, One can tell that some, if not all, of the entire right wing radical extremist so-called republicans and their smelly minions are Liars, really Big Liars.
Another completely FALSE and distortion of the FACTS by Vidi - a commonplace occurence. Please see the linked chart of national debt by President:
http://www.skymachines.com/US-National-D...
What you will see is an increase of the debt by a toal of $5T by George Bush over an eight year period. Not very good and a reason why conservative Republicans turned their backs on Republicans in 2006 and 2008.
But not $12T like the fraud Vidi would have you think. But that's not all...the Mad Hatter Barack Obama has increased the deficit by almost $3T in under two years!
And it is going up dramatically!
The percentage of debt to GDP?
Reagan - High of 52.6%
Bush I - High of 65.9%
Clinton- High of 68.1%
Bush II- High of 74.1% (Last year - all other years under 65.6%)
OBAMA - 86.4% and 90.5%!
That's right, the Mad Hatter has increased the debt to GDP ratio to the tune of almost 20% of GDP!
And the Democrats want more and more and more!!
Is there any reason why these children need to be sent home and:
Capitalists and Parents back in charge!
The GOP love Trickle Down Economics
Google Trickle Down Economics and read all you can about what they love then vote Democrat.
Gather the information then vote or just listen to people like gogowhitesocks and trust a complete stranger to lead you paradise.
Democrats love "Trickle Up" economics. THat theory has never worked in the history of mankind.
Look at the effects of a huge government works prgram and spending on entitlements. In every case it has damaged the economy dramatically.
See for yourself - and then vote Republican!
Google Trickle Down Economics, read and decide if you like it. You will have bubble after bubble and recessions. The rich get richer and the poor get poorer.
BAAAAAAAAHHHHHHHHHHH!
Harry Reid: Repeat after me, Vidi..BAAAAHHHHH!
Vidi: BAAAAAAAAHHHHHHHHHHH!
Harry Reid: Again, vidi, so you don't forget: BAAAAHHHHHH!
Vidi: BAAAAAAAAAHHHHHHHHH!
Harry Reid: Good little Vidi, now remember to bleat those lies as many times as you can until you can get our fellow sheep to repeat this: BAHHHHHHHHHH!!
Vidi: BAAAAAAHHHHHHHH!
Lead those Blind Sheep to Paradise gogo :~)
You Betcha! Edspit!
American Taliban member gogowhitesox has been playing with chemicals with Hazardous labels. It shows Harry, it shows.
I think gogowhitesox's name is Harry Reed. He just can't stand it.
Relax Harry, it'll all be over soon.
Yes, Jeffrey, it WILL be over soon.
Take a look at that ninetieth week of unemployment check you just got - it will be on Antiques Roadshow in twenty years.
Maybe you can crawl out of your cardboard box by then and find out what it's worth in 2030....
Your freeloadin' days are numbered, little lamb - you'll be led to slaughter in 56 days!
Nov. 2 - Capitalists and Parents back in charge!
November 2007 they put FASB 157 into action and by the end of 2008 the United States economy was on the brink of total collapse. In April 2009 most of FASB 157 was put on hold and the Stock Market rebounded 60% in the next 12 months. Mark to Market insanity caused the meltdown and continues to be the reason this country is going no place.
Real Estate is in freefall because FASB has withdrawn the foundation of our economic system. Traditional valuations based on cash flows have been tossed aside for the madness of valuing 30 year assets as if they are worth what they bring in an Ebay auction everyday. Who is buying when nobody knows what anything is worth? Who is started businesses? borrowing money? hiring people? NOBODY.
END FASB and you solve most of these problems inside a week.
The posts starting at 1:25 pm by the "Thing" and ending at 8:53 pm are nothing more than one continually smelling drivel of misinformation.
VidiVeritas:
The best part of this whole election cycle is that guys like Harry Reed (aka the American Taliban member "gagonyerwhitesox") is that he will lose either way. If the dems win, he's just another smart mouth punk, if the repubs win they will throw him out AND under the bus like a $39 suit from Goodwill.
It's always a lot of fun reading all about the achievements of Ronnie "Raygun"... Ha! Ha! Ha!
"Mr. Presidential Platitude" is looked upon by right-wingers as the second coming of Christ. Is there anything funnier than that?
Reagan, at best, was an average president whose greatest claim to fame was that he was "B movie actor" in Hollywood before becoming a politician.
One of his most popular movies was a movie entitled "Bed Time For Bonzo," which saw a chimp become the star of the film, up staging the intended star, Ronnie Reagan.
Actually, Reagan was a "multi-tasker."
As president, he never missed the opportunity to take a nap or two during a Cabinet Meeting; he could tell a joke or two with the best of them; and he made jelly beans a very popular candy...
Doesn't that sound impressive? It does to me....
The "Gipper" some how convinced the media that he should NEVER be held accountable for anything that he said or did, and when he didn't wish to answer a tough question that was tossed at him by the media, he simply said "I don't recall."
His wife Nancy was invaluable to him, and she almost daily gave him advice about what he should do about many of the problems facing this country.
Of course, Nancy never gave her Ronnie advice until she had the opportunity to first talk with her astrologer...The astrologer being a lady named Joan Quigley.
She did that each and every morning before her Ronnie went off to work as our president. In some ways, one could say that their marriage was a marriage made in heaven, or at least in outer space!
Ronnie NEVER carried a balanced budget in his 8 years as president, and borrowed from Social Security like there was no tomorrow.. Of course, he ended the Cold War, or least that's what most "Dutch lovers" will tell you...
He greatly increased the national debt, and came close to convincing a Republican Congress that we should spend trillions and trillions of dollars on a defense system that came to be knows as "Star Wars."
I think it's interesting that even a "slow on the up take" GOP Congress balked at Ronnie's request and the whole thing died in committee...
There is one thing, however, that can't be denied when talking about the presidency of the "Eureka Flash."
He made people feel good about themselves, and this came about during a time period when we as a country had very little to feel good about....
A few of the Reagan backers have recently pushed the idea that the "Gipper" should be added to Mt. Rushmore, joining Washington, Lincoln, Jefferson and TR on that national monument.....
That might work, but I have a better idea......
Why not put a picture of Reagan on the $10,000 bill? That way, all of his rich friend would always have a picture of him close to that part of their anatomy that best characterizes them... Just a thought!
El_Lobo, Reagan wrote "Where is the Rest of Me" and when he was running for election, that book disappeared.
I not only wonder where is the rest of Reagan , but both Bushies, and the majority of the so-called republicans.
Speaking of one of the Bush guys....
Junior is finishing up his book and it's scheduled to hit the book stores right after the November 2nd election...
I get so excited just thinking about it....I love a good fiction book now and then & I'm looking forward to reading a book written in crayon...
In November, slam the door in the face of these
crazy, greedy republicans.
These good for nothing idiots aren't worth
2 cents.
SAVE OUR COUNTRY,
VOTE HARRY REID.
Obama has no clue how to help anything but welfare and social degenerates.
His plan was to rebuild America's infrastructure when they crammed the stimulus bill down our throats, he lied. This dumbass give us 38 billion out of 785 billion, 50 billion will do nothing for our industry and will not stimulate anything except the oil companies profits when they raise the their prices of asphalt oils to another all time high and cement and fly ash manufactures jack up their prices on raw products just as they both do when bidding shovel ready projects.
Obama is too stupid and has only one goal, screw American's who work and redistribute our moeny to his minions that don't work and for the most part, useless lazy people who will likely never become productive members of society.
C'mon 2012, he's out of here.
You republican idiots run on a platform of
total failure.
Useless and good for NOTHING.
President Obama has an I.Q. OF 172.
That's genius, the smartest man in the room.
President Obama will be easily re-elected in
2012.
NO PROBLEM.
January 20, 2013 the end of an error....