The Stimulus. Your Thoughts Going Forward.
OK. So the stimulus will soon pass. Debate at this point is pretty much ceremonial as different politicians will position themselves for a variety of good and bad reasons on the yea or nay side of these bills from the House from Senate. That's politics.
But I'd like to see what people actually think of the stimulus:
Agree or disagree and why?
What do think it will accomplish and why?
What do you hope it will accomplish and why?
Me, I oppose the stimulus. I don't oppose because of the price tag. O don't oppose it simply because of the debt it will incur. I don't oppose it for political reasons. And I certainly don't oppose it for what its supporters think it will do.
I oppose this stimulus because I don't believe in the very hazy and shoddy thinking that goes into it. I do not think it will work as advertised. Actually, I KNOW it won't work as advertised.
If I THOUGHT the thinking behind it was sound and could work as advertised, I would support it. But neither is the case.
In order of the theory of the Keynesian multiplier and "pump priming" to work well in reality, it would require a level knowledge and coordination that simply doesn't exist in the hands of so few people.
So, in short, reason #1 is a knowledge and coordination problem. (See Hayek's Nobel Prize...this is why he got it.) BTW, Krugman's Nobel was for advances in Trade Theory. Not this stimulus business.
And yes, this IS a real problem. No pro-stimulus Keynesian economist will seriously argue this point. What they will do is dismiss it as being to complex to worry about. What they will do is ignore it because the foundations of their conceptualization of the economy force them to think in terms of raw generic spending and output. From there, some somewhat useful...but overly relied upon...ideas like "aggregate demand" and "the paradox of thrift" come into economic vernacular. They serve a purpose but they are inadequate as foundations for policy action.
The reasons for this can be found in my next reason which is more complex and NOT an area that appears on radar of Keynesian Macro:
The other serious problem I have concerns capital theory and its place in nature of trade cycles. Output has fallen and production has fallen because there are serious misallocations of capital that have accumulated over the past few years and we now have capital allocated in very poor structures which the market is now reacting to. The Keynesian will say that output has fallen because people aren't spending enough which is hurting aggregate demand and enabling the harmful paradox of thrift. The idea here is that everyone's spending is someone else's income. Again, that may seem true but it misses the larger point of what is happening in a system of exchange.
To me, that Keynesian explanation is like saying that the man who tripped and hurt himself got hurt because he hit the ground. Or that the man who died of a heart attack died because his heart stopped. Well, yes. That's true, Captain Obvious. But the man who tripped got hurt because HE TRIPPED AND FELL IN THE FIRST PLACE. And the heart stopped for any number of reasons. Keynesian thinking doesn't concern itself with what CAUSED what they dwell on. They simply dwell on the RESULT of that CAUSE and feel that this framework is sufficient and the best that we can work with. I disagree.
And the Keynesian would partly disagree with me and partly dismiss what I said as irrelevant because the insight is not helpful in their framework. See the problem?
Capital is not play dough. It cannot be simply or quickly reformed and reshaped into something useful and sustainable. If there is too much capital and labor misallocated in, say, construction, then we have a problem. And we also have a problem with all the related or subordinate capital that is structured around it in multiple layers.
Think of de-fragging your computer. When you hit "defrag", there are many blocks that start to get moved and replaced. That's what a recession is. Capital is like leggos, not play dough. the blocks must come apart and find better uses and put back together different according to dispersed information. And it's painful in the process.
What the stimulus does is ignore all of this. It simply feels that spending must be propped up and idle/underused resources put to use to start the multiplier effect to get output back to where it was. It never questions whether that is a good idea or why these resources are idle in the first place beyond the observation that spending is low. That is simplistic and simply insufficient as a foundation. It ignores heterogeneity of capital. IOW, capital and labor are NOT homogeneous.
When confronted with these complex concerns of massive capital misallocations intertwined is a myriad of mind-boggling ways and their effects on the economy, the pro-stimulus Keynesian simply cannot be bothered. Their models don't have the depth or capacity to wonder about or question such complex detail. It is dismissed.
Never mind why output down...it's a matter that output is down and must be propped up. The economy is effectively running a very high fever and fighting off a lot of "wrong" and all the Keynesian is equipped to really offer is heaps of ice to get the body temperature down. This doesn't solve the problem.
So the second reason is capital structure problem.
Now, yes, the stimulus can do some limited good....IF it can target truly idle and underused resources and put them to work. But that is hard to do. The stimulus will not simply target underused resources. It will wind up going to resources that are best connected to get the funds. It will not target small contractors armed with a P-up and a hammer who are out of work with laid off help. It will not zero in on builders who cannot make ends meet for lack of projects. It will not make sure that mortgage lenders and brokers who are laying off help will get the business for these loans. It will not real estate firms with tons of real estate available and no business to make sure they find buyers for them. That is nearly impossible to. What the stimulus will do is shower states and municipalities with money for projects and such jobs will wind up the pipe lines of firms that already working.
This is a Public Choice problem.
Now, others will say that these projects have a long term good and are will have positive externalities. And that may be true. But such reasons are no longer stimulus-related.
If $90 billion of the $825 billion actually finds its way into needed hands, I will be surprised.
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Comments :
I agree.
But maybe I should pretend to be Rothbardian just so I'd have something to argue about with you.
I think the main point I'd like to pull from your post, if I may, is that our problem exists as it does today because of the poor allocation of capital. The artificially low interest rate, as indicated in one of your previous posts, kept the appropriate signals from being communicated. Targeting these same industries that have been hit hardest is simply going to ignore the signals once they did get through and allow it to persist further. If not, these same industries will again be pawns of the Fed as their ability to stay in business is directly related to poor monetary policy.
Indeed,
and if we want to work backwards from where we are, we coduld go on for hours about where the knots formed and led us to where we are.
One point I did expand on enough is the idea stimulating idle capital and labor. Yes, we can stimulate...theoretically...a lot of underused resources but nobody wonders if that will actually accomplish anything beyond simply propping up spending and no one wonders if that is actually the right course of action.
As I read somewhere recently, we could start to pay people to mow their own lawns. That will increase "total output" technically because it will now show in GDP....but are we better off? No.
That of course is a little different than finding truly idle contractors to build things under the banner of public goods in an effort to help aggregate demand but it does touch on a bit of the hypocrisy with many economists who choose to scoff at generic increases in GDP as not necessarily improving real conditions. I agree. It doesn't. But funny how that is precisely one of things they seek to increase through stimulus and use as their benchmark of success.
Since you oppose the
stimulus, do you have a suggestion has to how to get the economy to stop bleeding?
It's is pretty easy to oppose something, but I just wonder if you have a step by step process in mind that is a) politically feasible, and b) that would actually work.
It would be good if firms that are working don't have to lay more people off.
The problem isn't capital it is credit unpaid in the future, as in debts owed, payments due, and the banks don't have enough to cover their debts, while at the very same moment the debtors are losing their income.
At the very same moment when state revenues are down, states need more income. Governors of Republican states are going against their party and calling for the stimulus to pass. If something isn't done there is likely to be a great deal of political unrest.
As you might have guessed I am for the stimulus. It will be reworked before it is passed. It will not be perfect, but it will begin to staunch the bleeding. Doing nothing is not an acceptable alternative.
I'm only half stupid
No it's not easy to oppose something thoughtfully
and with good reason. I presented a thoughtful criticism of the stimulus.
My question to all what they thought of the stimulus and why. I did that.
What say you?
Switching gears and asking me what I would do is another matter.
Let's address the topic at hand first.
This statement is too simple
Capital is what is behind all this. Calling it credit is simply speaking of it in a different way and at a different point in time.
Well I like simple
If the creative investment class had kept things more simple, then credit/capital would not be in a black hole somewhere owned by someone no one can find.
If investment instruments and the mathmatical risk models that they rated this capital/credit with hadn't been so extraordinariy complicated, as opposed to not simple, to the point that even the most brilliant minds don't understand their value, we might not be in this mess.
You can call it capital, if you like. I will call it insanely leveraged credit risk, sold for profit and insured by insurance companies who 'innocently' can't make good on the claims, which is what blew up the banks
If banks were the original holders of the original loans/capital/credit then it would be relatively simple to discover the correct value of the home. But they sold debt, for profit.
Just look at credit capital as work that will be done in the future (money owed), or future productivity if you will. Future productivity looks to be down.
IF:
Calling credit capital is simply speaking of it in a different way and at a different point in time.
THEN:
I would suggest that something got stuck in a time warp somewhere and deposited on another planet, because no one seems to be able to find this capital in the future at a different point in time that you speak of.
Meanwhile back on planet earth, the banks are being a bit constipated with their credit capital in real time. 'They' fell on a crack in the sidewalk and it is causing me pain.
I'm only half stupid
You proclaim a lot more than you explain
You're venting about these matters (and not addressing the thread at the same time I might add) in a way that makes it hard to discuss.
Here's one sentence that is somewhat tangential and makes some sense:
Well, yes....sort of....at least the part of the being the future. But now we have to return to misallocation and problems it presents.
The bank fell on
the crack in the sidewalk.
Future productivity looks to be down.
There was a misallocation.
To make up the difference we need to create capital/debt to ensure future productivity.
The future productivity will ensure that capital is created.
The stimulus plan will work over time, because productivity/labor will create capital.
IN other words the stimulus plan will ensure the banks that their balance sheets will eventually be rectified.
It is just going to be a lot slower, very much slower, than the break neck pace of instant gratification capital/debt ratio created wealth in the future, credit/capital than we are used to.
I would recommend that to stimulate the economy that investment bankers (the private sector) turn their second and third homes into cheap commune style rental properties. The demand is there and it would be stimulative to the economy.
The venting is because to solve the problem you have to understand the problem. I am not sure that folks really get it. The problem is global, as in foreign countries are pissed at the US and are reluctant to trust the US.. Quite serious really and painful.
The CEO of JP Morgan is of course whining that the regulators weren't on the job. It's the regulators fault.
Good news. We can modernize regulations next week or next month. Another piece of the puzzle solved.
Stimulus, global co-operation and coordination, more cash injected into the banks, and regulation will begin to address the problem.
Step #1 is a return to confidence. Suggestions.
I'm only half stupid
Ha. Why did I even bother writing the diary?
I just spent an entire diary explaining exactly what is wrong is this very quote. That's just the point I was explaining in the diary under capital structure and the whole messy detail that the Keynesian logic doesn't address. With misallocation and messed discords in capital structure, there IS no difference to make up. It's not a question of difference. That's just the point!
No. it doesn't do this nor did you explain exactly how it does. Bank's balance sheets are off because the reality of adjusting prices crashed down and the parade. Stimulus will not change this. The Bank Bailout is showing this. The Stimulus is something diffferent.
Exactly. I spent a lot time doing my best flesh out the problem and stay somewhat logically consistent at the same time. Misallocation and "making up the difference" don't really mix...as I showed in the diary which didn't really make an argument against. In fact, you simply repeated the flawed logic that I explained as such in the diary.
At least explain why my argument for why the logic is flawed is wrong.
I explained why it is. You didn't explain why it isn't.
!!
I have no clue why this double posted!
I'm only half stupid
On further review
I think you misread the problem when you say that there is no misallocation, therefore there is no difference to make up.
And for the record, I am not trying to be difficult here, I honestly think you are wrong/misreading.
What you miss, imho, in your equation is interest rates, or 'putting your money to work to create capital, that has nothing to do with productivity.
What you miss is that the capital created was not real. When hedge funders can borrow more stocks than exist, and these stocks were false values to start with, it is a set up for a disaster.
The profits were taken before they were produced, or capitalism interrupted. Beware of false profits.
Let's say that our 'patient' the overall economy has had a heart attack. The Keynsian Dr. is saying bring out the electrodes, apply shock to revive the patient. Once the patient is stabilized then we can diagnose the cause of the heart attack.
To me you are arguing that to save the patients life it is more important to find the cause of the problem, first. In the time that you are searching the patient dies.
I am saying that nothing is solved if the patient dies by refusing to use shock, or stimulus while you are searching out the root cause.
Meanwhile, as we wait for the stimulus, or shock treatment, our patient has had it's feet amputated, his arms are gangrenous, and he has an arterial blockage in his brain. Every day we wait for you to find the root cause, because you are anti-stimulus, our patient gets sicker.
I'm only half stupid
What am I misreading?
No. I said there is indeed a misallocation and that there is no difference to make up because the whole idea of "making up a difference" is flawed...something I explained in the diary.
The idea of "making up a difference" in the form of extra spending is the Keynesian logic behind the stimulus. It works for the Keynesians because they ignore the whole idea of capital structure for various reasons. Again, all explained in the diary.
I didn't miss any of that. I discussed all of it. And for what it's worth, you are actually repeating some points that I made via paraphrasing...and they fit right in line with what I'm talking about. Yet, you seem to make these points in an effort to establish some opposing point. It doesn't make sense.
I don't think you are trying to be difficult. I simply think you honestly don't really fully understand what I've said in the diary.
Ah, the danger of analogies. Now I see what others were saying. The analogy was used to describe the limits of how Keynesian Macro seeks to understand the problem. You've managed to make it out to be something else. Of course, if you read the analogy part as a footnote and in unison with the economic explanations I gave, you see what I really mean.
You are trying to draw too much from the analogy as a stand alone statement instead of seeing its sense in the context of the body of what I wrote.
What you really mean
but what you aren't saying or explaining in any clear language is that we should do nothing.
I'm only half stupid
I wrote a diary already
It's all there.
Don't read the analogy as a stand alone argument. The analogy is a supplement to what I already wrote.
I get the impression that you try so hard to make debate that you miss the forest for the trees sometimes. Like I said, it's already in my diary. I already made my case.
Maybe you should reread the diary, truly get what I'm saying and then ask questions therefrom.
If you say so
Your language isn't at all clear to me and you haven't made your case in anyway that I can understand or make sense out of.
If you want to remain intentionally vague to create some aura of mystery around the intellectual depth of your argument, that's fine. I don't think it does a lot to move your product off the shelf.
I'm only half stupid
I don't think I'm being vague.
Maybe you just don't understand. And that's fine. It's not a criticism. But since I'm not sure what exactly you don't grasp in the concept, it's hard for me to clarify.
Change your user name to St. John...
...because you have the patience of a saint!
I can see you now, walking down the streets of philly, tossing a buck in a cup and having a quick chat on economics with the cups unhinged owner... ;-) LOL!
God bless ya brother.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Ha. Well, I wouldn't go THAT far
but thanks. I guess.
I actually don't discuss these matters...or politics in general... very often in person. People don't ask, I don't tell.
Facts are facts...whether you're a liberal and hate it or not
Just so we all remember what we're dealing with...
Now this young fella goes into some dated material regarding the election, and unfortunately that's water under the $825 Billion dollar bridge, but he makes some spot on observations about what we are really talking about here...these are just the kind of people who will be flocking to the Republican party in the next 4 years as their eyes are opened...
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Wow.
That was interesting.
I'll leave it at that.
I embeded the wrong video...Check this one...
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
:-)
n/t
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Ok...probably wrong thread to through these up on... ;-)
Good diary John...I didn't mean to take anything away from it...
...or did I?
No...kidding...I didn't...
Nice job.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Do We Have to write the questions?
I kid of course..Vent time...
Agree or disagree and why?
I disagree with the stimulus because of all the non-emergency stuff clogging up the bill. If the key things are tax cuts, infrastructure improvements, and "green" upgrades, then let's just keep it to that and put pet projects in another bill can we please? National Endowment for the arts? Cut it. Anti-smoking initiaitves? No. Keep the bill clean and simple. I don't understand why they can't understand that.
What do think it will accomplish and why?
I don't know because I'm not old enough to have seen anything like this before. I think that the economic shock it will create may help give the economy a temporary boost--but I think natural market adaptations will soon return and the stimulus will appear to work--I think by Q3 or so we'll start recovering, and they'll probably attribute such a recovery to the package details, while I think the "idea" of the package will be what really works.
What do you hope it will accomplish and why?
I HOPE that the stimpack will start a serious development of independent energy sources here in the US. I also hope that the package will put people's confidence in the economy again and that we can stop talking the economy down. Finally, I hope it will prove Peter Schiff wrong, because we need to reverse the countrys downward trajectory.
http://wealthweekly.blogspot.com
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I'm split
On one hand, we're truly rewarding both the banks who took such risks and the investors who threw their money into that risk. I've said it a lot lately, but it still needs to be said:
"What part of 'not FDIC insured' don't you understand?"
Decartes' valley and mountain is similar to our situation. With every bubble there is going to be a crash. Our extravagance over the years is finally catching up with us -- chickens coming home to roost if you will. And chickens coming home to roost never made me sad.
On the other hand, a lot of people that have nothing to do with any of this are feeling the effects. There was so much bad debt out there and the banks basically had the government by the balls and were more than willing to take everyone down with them if they didn't get their way. Allow me to use another quote:
If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.
And guess who the bankers' bank is? The American people.
I lean toward the former position. None of us are completely blameless. It's time we got tough and drew the line here and no further. You screw up and there won't be any more handouts regardless if you take half the country with you. We're done cleaning up your mess.
With respect to how the money is being spent (if indeed we are going to be spending any money), I favor direct payments to the people. By my calculator $825 billion equals about $2500 per person. Lets cut the payment for the richest 1% and throw that in for the people at the bottom. Government need not provide us with everything we need, but it should provide the tools so that we may provide for ourselves.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
well considered, stinerman but...
even a direct check to everyone minus the top 1% isn't precise enough. There are actually people all over the income chain who do and don't need stimulus...assuming we accept the theoretical premise.
How do we decide how to target those in need of spending assistance and how much?
There may be a family that was earning $150K per year in NYC that is now at $95K. There may be a family in KY earning $65K that hasn't felt the effects of the recession. You see?
This is the kind of coordination problem that flies in the face attempts in the past to believe that we can somehow know this,.
By no means is that plan perfect
I'm happy for a cost of living adjustment of sorts so long as it isn't too involved.
My opinion is that trying to fine tune too much ends up causing trouble. We simply don't have the precision that we'd like to have, so why waste time and money trying to make such an estimate.
And I will admit to some self-preservation here. I'm doing really well at my new job, but another $3000 from Uncle Sam couldn't hurt. :-)
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
How about a first step...
..and just agreeing that the economy is in trouble, perhaps very big trouble
, so we should in the very least use the opportunity to dial the economy in, and that means using the money in the bill for .....you guessed it, real stimulus.
This should not be a late Christmas wish list fulfilled
kind of windfall for anyone.
I for one would feel much better about it, regardless if we agreed on the exact right course, if at least it is not a bill full of blatent bogus misappropriation, which this clearly is.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
As long as we keep electing them
they'll continue to load up every bill with as much pork as we can stomach.
Say hello to a consequence of our two party system. Take your pick between bad and worse.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
This is the most egregious offense of that...
..I have ever seen...
The sky is falling and 350 Billion Dollars later, they ask for what if we don't do will sink the economy, seriously, what will essentially amount to a Trillion Dollar deal, and to think in this, a time of national crisis, and universal concern, 85 % of it is flat out unproductive or pork!
This really is pissing me off.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
I don't think we can evaluate
I don't think we can evaluate the merits of the stimulus until we see the final bill that get signed.
The House passed a bill.
Next week, the Senate will pass a bill that will be substantially different (by all accounts) from the House bill.
Then both houses will submit a group of members to committee to "merge" the two bills and come up with an entirely new bill for both houses to vote on.
It is only at that point that we can truly judge the merits of the stimulus bill.
If your argument is that *ANY* stimulus bill is a bad idea, then obviously you won't like the final bill.
But I can't judge the stimulative value of the bill until there is something to actually look at. The final bill won't look like the House bill.
I survived the Bush Administration
The House didn't pass anything....
The democrats in the house passed a bill, true.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Mildly positive
I mentioned in another thread that I can see the sense in splitting this up into an immediate stimulus bill, and a long-term growth and sustainability bill. I am sure the immediate stimulus parts would get much more Republican support. But as the balance of power stands now, the Democrats don't really need to do that, and can get most of this passed in one fell swoop.
I am mildly positive about the whole package because a good portion of the spending that isn't direct stimulus, at least seems to be going towards things that are of long-term importance. I am all for the sustainable energy projects, the energy-efficiency retrofits, mass transit improvements, and that kind of thing. These seem to be mostly spend money now / save money later projects, that also provide some jobs right away. There are also plenty of projects that maybe aren't particularly cost-effective, but will at least create some temporary jobs, and are things that need to get done - bridge repairs, school roofs, various infrastructure projects.
I am only mildly positive because there are clearly some bits that are neither cost-effective nor particularly important. It would be nice if some of the chaff were removed, but I don't realistically expect anything designed by committee to be 100% efficient.
We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki
What I question about it is:
Why did President Obama compromise with the Republicans by removing the part of the stimulus program that funds programs that provide contraception, etc., for low-income women? That, to me, seems unwise. The last thing we want, particularly right now, is an increase in the incidence of unwanted pregnancies that would invariably result in an increase in the welfare rolls, which would not help create jobs, or stimulate the economy at all. One doesn't have to be a parent to realize that bringing up kids, particularly nowadays, is prohibitively expensive, especially if people either don't have enough, or are just barely squeaking by as it is.
Imho, taking out the funding for contraception for low-income women IS NOT RIGHT.
It's possible that a program
It's possible that a program such as birth control subsidization is understood by Democrats as a program that they could pass on it's own. With the kinds of loose logic you used above there would seemingly be an infinite number of things one could justify in the name of proping things up. But more important, I think, is the understanding the Democrats now have as it's become obvious they can simply push through whatever they want with no need to pay lip service to cooperation. The Obama Presidency will be full of talk and none of the walk when it comes to actual compromise. That became obvious to me on November 4th, 2008 at around 10-11PM CST.
I'm glad they pulled the birth control language out. It doesn't
belong in the stimulus bill. It belongs in it's owm bill which the Administration said they would introduce shortly.
I disagree here, kindness.
I think that funding for birth-control for low-income women really is essential. I don't think it should've been taken out of the stimulus bill.
What makes you think...
...it would make it any more available?
Birth control is readily available throught America in mass.
Whoever should want it, wouldn't have the slightest problem aquiring it.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Well I thinkk the answer is obvious
Cost. Availability is one thing, affordability is another. Both are important in order to see actual use. When money is tight prophylactics aren't usually seen as a necessity the way food and shelter are, nad yet missing out on them means a decent chance of pregnancy which greatly exacerbates the financial stresses.
I came. I saw. I posted.
Veni, Vidi, Bitchy.
Anyone can obtain free contraception...
...through the ubiquitous PP channels.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Are you sure about that?
I know PP tries to help women with a sliding scale for those who are low income, but I don't believe they offer free contraceptives continuously. I did a quick look on google to see if I was mistaken but the only things I saw were special events.
I came. I saw. I posted.
Veni, Vidi, Bitchy.
Go to PP, if you are pregnant, free abortions, if you want...
...the pill and don't have dough, you never walk out empty handed.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
I can say from experience
That this statement is false or at least was false as of a few years ago.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
Unfortunately, I can say it is...
n/t
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Perhaps
...California has gone through the waiver process that the House Bill was originally going to stop requiring from all states, and Ohio hasn't.
We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki
Well
Obviously I can only speak to the conditions in Ohio in approximately 2003 or so.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
If they can nail ya for 300 bucks they will...
...but if you don't have it or whatever it gets done.
Makes ya wonder what they do with that 300 million dollars of taxpayers money the federal government foolishly dishes out to them every frick'in year!
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Costs of contraception?
No. Again, I disagree. Contraceptives and access to abortion rights are far, far cheaper than bringing unwanted children into this society and the world at large. Bringing unwanted children into the world is one of the biggest, if not THE biggest crimes against humanity. Also, with rare exceptions, even the tiniest newborn baby can sense when s/he is not wanted
I think you misread what I wrote
I was saying that cost of birth control could cause poor and middle class people not to use it. I agree that birth control is far more economical than unwanted kids.
I came. I saw. I posted.
Veni, Vidi, Bitchy.
They whined loudly
That was the issue the Republicans latched onto as an easy bumper-sticker style sound bite that they could moan about. It doesn't matter to them that it is a good, money-saving idea.
You are right. I blame the Republicans for their politically-motivated choice of which part of the plan to attack most outspokenly (rather than choosing a part that actually was a bad idea), and I blame the Democrats for rolling over without a fight, particularly when the facts were on their side
.
I suspect the funding will come back later, if and when congress takes on the whole health care issue, but it should have stayed in this bill.
We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki
How do you want to handle the banks & bad paper though?
Up until now the model has been to shove capitol into their gaping maws in hopes that it would shore up the markets and bring confidence.
I'm afraid that the new Administration doesn't want to be seen as anti-business & upsetting the apple cart right off the get go. Myself, I think something like the Resolution Trust Fund that Reagan set up in the 80's for the savings & loan crisis is the best model. At least then we could identify the bad paper, value it properly & separate it from the good debt. Oh yea, & fire the leaders of the banks they take over. Stop rewarding the morons that got us here.
I don't know that there is a good way to do that.
They've already dumped a ton of money in the banks and it hasn't had the desired effect. The banks know there is bad paper out there and this process of trying to acquire via government baliouts is simply prolonging uncertainty and stability.
The banks are not reacting in ways that the Bernanke and Paulson wanted. The incentives they put out there are not the ones they had hoped for. In a way, this attempt to weed out bad paper is making the rebound of banks grind to a slow crawl. They are simply waiting and reacting to what the government is doing instead of taking any actions.
I think this is the key point
I think this is the key point to the failure of TARP. Not oversight.
Simply giving money to the banks did nothing to encourage them to lend again because giving them money doesn't change the problem they have with overvalued assets. They fed twins should have bought up the bad assets rather than "inject" money if the desired outcome was to encourage lending. All they really accomplished was to allow poorly managed companies to float on printed money.
I'm ambivalent
A stimulus bill is probably a good thing but this one does have unnecessary stuff in it that dilutes the utility of it as a stimulus pakage. That being the case the best use of it is a vehicle to pass things that otherwise might be fillibustered or have holds put on them.
I came. I saw. I posted.
Veni, Vidi, Bitchy.
Arnold Kling's 19 point outline against the stimulus:
See here
for full text.
Kling will be making a 15 minute statement against the stimulus package as it stands.
His objections to it and thoughts on the matter are broken down into 19 rough points.
I saw one of my objections to the pro-stimulus logic in there:
Point #16 shows how fuzzy and unreliable Macro really is. And yes, both used the same system but different assumptions. It's really that arbitrary.
Point #7 concerning banks is well noted on this thread and others.
Worth a read.
Unemployed investment bankers
will drive bulldozers if the alternative is to starve. Believe me I'm looking at a lot of jobs right now where a degree in physics isn't exactly a pre-requisite. Why? Because I like the idea of my family having food. I think the change in degrees reflects a degree inflation much more than an actual change int he workforce. Consider that in that same time period the percentage of americans involved in engineering and science has gone down. You see so many graduates now a days because even secreterial positions want a degree now (see "administrative assistant"). The biggest sector of our economy is the service industry (by a large margin). Those aren't people making things, orfiguring out things. They're basically logistics jobs, by and large, and don't really need college degrees (even if they tend to require them).
I came. I saw. I posted.
Veni, Vidi, Bitchy.
JMK would say that unemployed
JMK would say that unemployed investment banker would necessarily NOT drive a bulldozer as opposed to starve. I'm not kidding. Read his stuff. That's the mentality of the guy who's ideas under which our current Presidential Administration is operating.
A non-economist's view
I tend to disagree with this package for the same high-level reasons you outline: "because I don't believe in the very hazy and shoddy thinking that goes into it. I do not think it will work as advertised." But not for the economic reasoning you provide.
I am not an economist, and I venture to guess that most House members and average citizens are not either. They, like me, are having to rely upon experts to suggest "what" should be done. Experts who, as Tlaloc is so very fond of pointing out, are practicing something of an art and not just a science, and who disagree with one another on both the gross and fine points of their field. But even giving them the benefit of the doubt and accepting that they know what should be done, I question our ability to implement it in any way that will have a meaningful impact on the people who are going to be hurt most by this downturn, and I dislike the accompanying rhetoric that seems to avoid telling Americans the truth.
If you listen to the average American you will hear their fear: losing jobs. I have yet to hear how spending $X on a new highway in Ohio in 2010 is going to help the autoworker who will lose his job this year in Detroit. The economic upheaval ahead will not be stopped by this stimulus. The people clamoring for action have this false idea that this package will save them, personally, or their neighbor. It won't. Even the estimates coming out so far, and I am sure they're SWAGs, is that for this package, we'll get about 1/2% less unemployment than without it. I'm underwhelmed.
But we can look to the government bailout of Wall Street as a prime example of how even a good plan can be fouled up by poor implementation. We have that as recent proof that enormous sums can be spent with the best of intentions with next to zero positive effect. And this was a crisis, deserving priority attention, careful planning and control, and oversight. Did it receive it? No. So why do we have such faith now that this package will be the magic bullet?
The majority of the items in this bill are just government programs, plain and simple. Calling them a "stimulus" is not only misleading, but also meaningless; under that definition, even the Iraq war was a stimulus. It created jobs, didn't it?
I think we'd do better spending this trillion of "stimulus" solely on healthcare, infrastructure, and energy. Eliminating heathcare costs will free up cash for business expansion and salaries and level the playing field with Europe and Japan. Updating our shared physical and electronic infrastructure is a very overdue investment, and should go hand-in-hand with the pursuit of alternative energy solutions since it is likely that significant changes in the way electricity is delivered may be needed (for example, to fully exploit solar power). I could support something like that, even though the price tag is enormous; well built roads and power grids last a long time, and there is something to be said for the power of focused national attention on just a few key projects. But a trillion for a hodge podge of pet projects that might have only a marginal effect? No. I want a better answer.
Thanks for taking the time I haven't...
...to say essentially what I would say, lol!
Even Obama himself is backing away from any result driven expectation on behalf of the people.
This is nothing more than the garish expansion of government, and ergo - the onerous spending that invariably ensues!
...and although you are right, economists do differ, don't they all agree we over borrowed and over spent ourselves into trouble here...how ironic.
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
I am in favor of a stimulus and infrastructure bill
But I do not like the House Bill. I'm hearing that the Senate Bill might be a little better in terms of more focus on stimulus and infrastructure and less stuff that is simply just more government funding of the same old tired programs.
And there's no doubt that your concerns about the allocation/targeting of the stimulus funds are valid and justified. I had an idea for a stimulus program that you might or might not like, but when I thought of it, I was think of it in terms of actually getting money in the hands of currently unemployed people while actually serving several needs.
Alright, here it is:
I assume at least 10 million seniors and disabled people live in their own homes. Being that many of them live on public assistance or some other fixed source of income combined with the fact that they are not physically able in a lot of cases, repairs on their homes do not get made in a lot of cases.
So, for $50 billion + administrative expenses (perhaps $10 billion more) we set up a special program with a fund to make up to $10,000 in repairs to 5 million homes owned by the old and disabled. There would be some sort of means test so that rich seniors don't qualify. Repairs could include improvements to accessibility that would tend to help the old and infirm stay in their homes longer as opposed to having to go into nursing homes (at taxpayer expense, perhaps). Other repairs would just be whatever is most needed-- some homes might need a roof replaced, others might need a new furnace, others might need a couple new windows and a coat of paint.
The program would not contract out the work... it would hire its own staff to do the repairs. Laid off people will get the highest preference to be hired. While existing companies might have the expertise to do the work more efficiently and franky the quality of work would probably be higher, the goal here is to get money into the hands of people who would not have incomes otherwise. Existing contractors may complain that this is unfair competiton, but most of this work would be on jobs that would simply never be done because the beneficiaries would not be able to ever afford it.
The program would have a sunset, perhaps in 5 years.
I haven't worked out the details of the program. To keep the costs of the program down, perhaps you might make beneficiaries over a certain income or wealth threshhold pay for the materials in their repairs. Anybody have any more ideas for my program?
skymutt: accept no substitutes!
while hardly perfect,
it has the right idea in not letting the stimulus become a boondoggle for companies with work on their plate already.
seems harmless and might even do some good. ;)
hehe
Some tepid yellow-bar approval for a new government program-- it must be an even better idea than I thought ;-)
skymutt: accept no substitutes!
Regarding the Stimulus package:
The Stimulus package is a good idea, especially when it involves the rebuilding of the infrastructure of the United States, which has been crumbling for a long time and has recently begun to suddenly show its age. However, there doesn's seem to be that many infrastructure re-building programs in place, and, especially in places like the old Ninth Ward of New Orleans, LA, which were hit really hard by Hurricane Katrina 3 1/2 years ago, where the stimulus package really is needed. Besides rebuilding and updating the infrastructure and levees down in New Orleans that were destroyed by Katrina, why don't they also rebuild NOLA's old Ninth Ward, where, instead of rebuilding/renovating houses of people that lived there, they either left them to rot, or demolished them. What a disgrace! Those houses, hospitals, schools, etc., should be rebuilt so t hat the people in the Ninth Ward who were displaced by Katrina can return and begin their lives anew.
For all you stimulus spporters out there...
...of which there are fewer every day!
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Fred Thompson - Common sense economics...
Got to luv Fred...
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman
Wow...I feel so much better! NOT!
GEITHNER: 'WE ARE NOT GOING TO PUT OUT DETAILS, UNTIL WE GET IT RIGHT'...
'We will have to try things we've never tried before'...
Access to government resources is privilege not right...
And then we have this nice reminder from the Democrats to the American people...
Gee...I care...
Underlying all arguments against the free market is a lack of belief in freedom itself. ~M. Friedman