Airline Pilot Forums

There was a good deal of debate here a couple of years ago about government spending as a stimulus to the economy. I was against it then and I continue to hold that view today. I'd be interested to hear from those who were for it then and who continue to think it was a good idea. I'd be very interested in hearing from those who supported it but have since changed their minds. I'd be fascinated to hear from anyone who was once against the stimulus and who is now for it.

Recalling the website TOS, I am not asking about the politicians who were/are for or against it. And I am not asking who you will vote for. Just wondering whose opinions, if anyone's, have changed.

WW

While I agree that government spending is an inefficient way to stimulate the economy, so is supply side economics. When you give anybody money in a bad economy, the first thing they are going to do is save it because no one knows if the economy will get worse. I think both options are tools governments can use to direct an economy, but they cannot save one. The key problem is market confidence and neither approach addresses that concern.

What's poor Joe Consumer to do? He spends lavishly, buys too much house, runs up huge credit card bills, and gets hammered for it. Having learned his lesson, he cuts back and starts saving, then gets told his thrift is harming the economy. :confused:

“The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” — John Maynard Keynes

“I work for a government I dispise for ends I think criminal.” — John Maynard Keynes


In retrospect it isn't a recap, it is a kneecapping of the economy, it will be crippled for a long time.



Even capital punishment could not make price control work in the days of Emperor Diocletian and the French Revolution. Economics does not say that isolated government interference with the prices of only one commodity or a few commodities is unfair, bad, or unfeasible. It says that such interference produces results contrary to its purpose, that it makes conditions worse, not better, from the point of view of the government and those backing its interference.
A government that sets out to abolish market prices is inevitably driven toward the abolition of private property; it has to recognize that there is no middle way between the system of private property in the means of production combined with free contract, and the system of common ownership of the means of production, or socialism. It is gradually forced toward compulsory production, universal obligation to labor, rationing of consumption, and, finally, official regulation of the whole of production and consumption.

Ludwig Von Mises

On a national scale, there are three groups of spenders -- consumers, corporations, and the government, right? Consumers spent well beyond their means in the years leading up to the recession, so as a whole, they have to spend less, save more and pay off debt. Corporations have massive amounts of cash on hand but are unwilling to spend it because consumer confidence is down and unemployment is up, so demand for their products is questionable. Would you make the decision to build a new manufacturing plant in this type of environment? So both consumer and corporate spending are weak. Every dollar earned is a dollar that was spent by someone else. So we can resign ourselves to the deepest, longest recession/depression possible -- or the government can step in and be "the spender of last resort" and attempt to stimulate growth. I agree with the general concept of government spending. I don't believe the government acted effectively in response to (and lack of anticipation of) this particular economic mess.

On a national scale, there are three groups of spenders -- consumers, corporations, and the government, right? Consumers spent well beyond their means in the years leading up to the recession, so as a whole, they have to spend less, save more and pay off debt. Corporations have massive amounts of cash on hand but are unwilling to spend it because consumer confidence is down and unemployment is up, so demand for their products is questionable. Would you make the decision to build a new manufacturing plant in this type of environment? So both consumer and corporate spending are weak. Every dollar earned is a dollar that was spent by someone else. So we can resign ourselves to the deepest, longest recession/depression possible -- or the government can step in and be "the spender of last resort" and attempt to stimulate growth. I agree with the general concept of government spending. I don't believe the government acted effectively in response to (and lack of anticipation of) this particular economic mess.

People who make these type of statements tend to think money, and the wealth it should represent originates from a printing press.
Government has no money(wealth) other than what it confiscates from its citizens.
What you are suggesting is that you can stand in a bucket and levitate by pulling on the handle, it won't work and it never has, the "spender of last resort" has been spending the money that does not belong to it on things we do not need or want. Funding projects that produce nothing in terms of real wealth by mortgaging the future always results in disaster.
Corporations have cash on hand because they don't spend more than they collect while generating real wealth, it is a beautiful and simple concept.

Government spending far beyond revenues confiscated created the "large mess" you speak of over decades, and somehow you think more spending will fix it?

I urge you to search your home for a single product manufactured by government or a single service that is not funded by productive citizens. Report back if you find one, I would love to see it.

Milton Friedman was in China studying their economy. He was visiting a large construction project, and noted that thousands of workers were using shovels, and asked his Chinese hosts why there were no bulldozers or backhoes in use.

The reply: “Using shovels creates more jobs.”

Milton Friedman’s classic response, “Why don’t they use teaspoons?”

On a national scale, there are three groups of spenders -- consumers, corporations, and the government, right? Consumers spent well beyond their means in the years leading up to the recession, so as a whole, they have to spend less, save more and pay off debt. Corporations have massive amounts of cash on hand but are unwilling to spend it because consumer confidence is down and unemployment is up, so demand for their products is questionable. Would you make the decision to build a new manufacturing plant in this type of environment? So both consumer and corporate spending are weak. Every dollar earned is a dollar that was spent by someone else. So we can resign ourselves to the deepest, longest recession/depression possible -- or the government can step in and be "the spender of last resort" and attempt to stimulate growth. I agree with the general concept of government spending. I don't believe the government acted effectively in response to (and lack of anticipation of) this particular economic mess.

Another possibility in the scenario you've described is that the individuals and corporations that currently have capital are unwilling to expose it to confiscation by the state. The "spender of last resort" only has the money they have removed from somewhere else in the economy.

The 'spender of last resort' is the polar opposite of King Midas--everything they touch turns into feces.

A couple of mild mannered defenses. I conclude that the Keynesians have been routed and have left the field.

WW

They will never leave the field, but at least Keynes could recognize himself in the mirror.


"Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back”
― John Maynard Keynes

Anybody want to take a guess as to what happens to a country when you have more people than jobs ?

If one is lucky enough to have a good job and health insurance then stimulus spending is a curse. However to those who are and have been unemployed for sometime a reason to hope.

It took WWII to get us out of the last depression. Spending then was far higher in regards to GDP then what the government is spending now. The problem this time is that we are starting out the current downturn already hopelessly in debt.

Skyhigh

If one is lucky enough to have a good job and health insurance then stimulus spending is a curse. However to those who are and have been unemployed for sometime a reason to hope.

It took WWII to get us out of the last depression. Spending then was far higher in regards to GDP then what the government is spending now. The problem this time is that we are starting out the current downturn already hopelessly in debt.

Skyhigh

In 1933, Roosevelt became President and appointed Morgenthau governor of the Federal Farm Board. In 1934, when William H. Woodin resigned because of ill-health, Roosevelt appointed Morgenthau Secretary of the Treasury (an act that enraged conservatives). Morgenthau was an orthodox economist who opposed Keynesian economics and disapproved of some elements of Roosevelt's New Deal. Although he was a Roosevelt loyalist and retained his office until 1945, in "New Deal or Raw Deal?" Burton Folsom quotes Morgenthau, testifying before the House Ways and Means Committee in May of 1939, the FDR ally did not sugarcoat it: "We are spending more money than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started and an enormous debt to boot."

------------------------------------------------------------------

WWII didn't solve the problem, what solved the problem was that the US was the last man standing in terms of major world economies and thus the sole supplier for many of the world's needs. Economic growth solved the problem.

Not much chance of that happening this time.

There are proven ways to fix the problem, but we are hell bent on doing just the opposite.

In terms of debt(spending) as a percentage of GDP, we are very close to post WWII levels right now. So that argument won't hold water.
If you consider the real unfunded liabilities of over 200 trillion dollars, then we have spent more than ten times the post WWII figure. Para nada.

Anybody want to take a guess as to what happens to a country when you have more people than jobs ?
No takers or is that just unthinkable at this stage ?:eek:

Ally

No takers or is that just unthinkable at this stage ?:eek:

Ally

No guess needed.

http://i237.photobucket.com/albums/ff249/jungle375/e19a8244.jpg


“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” – Ernest Hemingway

All :D of the pictures that you post are interesting and where did you find this one ^^^^^^



Ally

Some of these pictures that you post are interesting and where did you find this one ^^^^^^



Ally

It is by Margaret Bourke White, one of the greatest photographers of all time, enjoy a few more of her photos here:

Margaret Bourke-White Gallery (http://www.smartwomeninvest.com/peoplepics.htm)

margaret bourke-white photographs - Google Search (http://www.google.com/search?tbm=isch&hl=en&source=hp&biw=1535&bih=873&q=margaret+bourke-white+photographs&gbv=2&oq=Margaret+Bourke-White&aq=2&aqi=g10&aql=&gs_sm=c&gs_upl=3500l6437l0l12141l4l4l0l0l0l0l344l1079l2-3.1l4l0)

It actually depicts people seeking flood relief in Louisville in 1937, but it has also become an icon for economic failure over the years.

White was famous before TV and the 24 hour news cycle for bringing the world to Americans in magazines that no longer exist.

And by the way my sweet, all of the pictures I post are interesting.:D

It is by Margaret Bourke White, one of the greatest photographers of all time, enjoy a few more of her photos here:

Margaret Bourke-White Gallery (http://www.smartwomeninvest.com/peoplepics.htm)

margaret bourke-white photographs - Google Search (http://www.google.com/search?tbm=isch&hl=en&source=hp&biw=1535&bih=873&q=margaret+bourke-white+photographs&gbv=2&oq=Margaret+Bourke-White&aq=2&aqi=g10&aql=&gs_sm=c&gs_upl=3500l6437l0l12141l4l4l0l0l0l0l344l1079l2-3.1l4l0)

It actually depicts people seeking flood relief in Louisville in 1937, but it has also become an icon for economic failure over the years.

White was famous before TV and the 24 hour news cycle for bringing the world to Americans in magazines that no longer exist.

And by the way my sweet, all of the pictures I post are interesting.:D

Not taking anything away from the quality of her work (I am unqualified to judge), but MBW was FDR's pet propaganist. Her mission was to find and photo desperate people. As they got closer to WW2 the people begin (according to FDR's edict) to look more spirited and hardy.

WW

Not taking anything away from the quality of her work (I am unqualified to judge), but MBW was FDR's pet propaganist. Her mission was to find and photo desperate people. As they got closer to WW2 the people begin (according to FDR's edict) to look more spirited and hardy.

WW

Agree, but one gal with a camera isn't propaganda. Real propaganda is ten international "news" agencies all in the same tank and running the same drivel 24/7/365.

Agree, but one gal with a camera isn't propaganda. Real propaganda is ten international "news" agencies all in the same tank and running the same drivel 24/7/365.


I wrote this AM before the coffee had taken effect. Dorothea Lange was the official photojournalist of the FDR administration. You are right about the rest.

WW

If one is lucky enough to have a good job and health insurance then stimulus spending is a curse. However to those who are and have been unemployed for sometime a reason to hope.

It took WWII to get us out of the last depression. Spending then was far higher in regards to GDP then what the government is spending now. The problem this time is that we are starting out the current downturn already hopelessly in debt.

Skyhigh

Another difference is that there is now no end in sight. Near the end of the war and in its aftermath much of the apparatus of state control of the economy was dismantled. Whole agencies devoted to rationing, wage and price controls, etc. were simply removed.

The Keynesians promised an economic collapse and they had it exactly wrong. Would that we had a 1946 congress to cut the budget again.

WW

Agree, but one gal with a camera isn't propaganda. Real propaganda is ten international "news" agencies all in the same tank and running the same drivel 24/7/365.
At least we have a choice of what babe looks hot reading the teleprompter.:D