Yeah, What About the Stimulus Package?
Posted on February 4, 2009 Posted by John Scalzi 98 Comments
In the comments to the Forrest Plumber entry, commenter Frank asked (somewhat sarcastically, but even so) what my thoughts about the stimulus package are. I claim no great insight in the process, but my thought is, essentially: seems like it’s needed at this point, and I’m happy to let Congress thrash it out a while to make sure it’s useful rather than simply large. Which means that fundamentally I don’t have a problem with the GOP complaining and getting all huffy about cost, etc. Mind you, given the last eight years, I find the sort of indescribable richness that one usually ascribes only to super-moist chocolate fudge cake in the idea of the GOP suddenly acting as if they’re grown-ups when it comes to federal-level fiscal responsibility. But we’ll see what comes of it.
Now, I’ve seen it suggested that the GOP has decided to oppose a stimulus package because they want the whole thing to come crashing down, make Obama look bad and thus they’ll look better, or some such. If so, I personally think this is an interesting strategy for a party that was defeated on the basis of its inability to comprehend what’s actually happening to the economy (and the people in it), a little like a drunk driver deciding it’s a brilliant PR move to wrest control of the ambulance taking him and the other wreck victims to the hospital from the EMTs driving the thing. Basically, I don’t think it would be as good an idea as they might think it is. It does seem of late that many of the GOP’s ideas, particularly the economic ones, have not been as good as they think they are. Which is why they find themselves in the position they do now.
Be that as it may, from a philosophical point of view, I am a fan of democratic processes, sober deliberation when it comes to money, especially in gargantuan sums, spending money wisely for the long-term benefit of the country and not spending a penny more than absolutely necessary. So let’s hope at the end of this we get a stimulus package that’s good for the country, rather than just more political posturing on either side of the aisle.
Perhaps the GOP is planning on eating that Schadenfreude pie.
Hm. Well, they identified about $20 billion in what they consider pork.
Seems to me…if that’s the stuff they object to*, they agree with about 98% of the package, and I would think that would be more than enough for government work…..
(and we’re not getting into whether $1.8 billion for high energy research or $550 million into improving biomedical research at universities is actually pork or not).
I really really really just want them to slow down and think about things. I don’t think the solution to the economy is to give government billions more to do random stuff. Why not cut corporate taxes by 50%? Why not just step back and let a recession recover on its own? There just doesn’t seem to be anything actually useful in the stimulus and we have progressives weeping in ecstasy at the glorious plan, and conservatives trying to remember if they have any ideals at all.
Of course, watching the republicans trying to reclaim fiscal ideals is almost as fun as watching progressives trying to square themselves around Obama’s rendition program…
It’s simple, the GOP does not know WHAT they are doing. They lost their way when they went down the big-government “conservative” path. The handfull of true fiscal conservatives are now trying to take back their party.
However, it’s not a matter of wanting the so called stimulus package to fail, it’s more a matter of knowing that it can do nothing BUT fail. The bill is about 98% porkbarrel Keynesian type stimulous. However all Keynesian stimulous is a broken windows falicy.
So the choice is voting for something that you know will fail (and probably make this worse) and saying “well I tried”, or voting no and saying “I told you so” when the inevitable occurs.
Unless it actually does work, in which case they get slaughtered in the 2010 elections.
The basic infrastructure work (which has been neglected of late) is almost certainly worth it.
It seems to be under heavy attack.
Well, a lot of it involves construction of some sort and if you can get construction hot again, that means a lot of jobs from day laborer to manufacturing to banking and eventually gives families stability and breathing room as money starts to move again. And LOTS of money moves in construction. Sure, some bankers might have to start learning how to swing a hammer or weld or lay asphalt. That’s not a bad thing.
I know a former banker working as a waiter and he’s in awe that he makes more money now than he did as a banker…. and is wondering if he should even go back to his old line of work when it opens back up. Who knows, we all might find all sorts of new careers.
Well, it’s interesting, because some of what they identified as “pork” is actually useful stuff, but might not necessarily fall into the category of “economic stimulus,” although that’s a rather difficult thing to calculate.
For instance, I follow a number of healthcare blogs because I write a lot in this area, and here’s from one of them:
Congressional Republican leaders have outlined what they think are “wasteful provisions in the Senate version of the nearly $900 billion stimulus bill that is being debated.”
Several health-related proposals are among those “wasteful” expenditures:
• $400 million for the Centers for Disease Control to screen and prevent STD’s.
• $75 million for “smoking cessation activities.”
• $25 million for tribal alcohol and substance abuse reduction.
• $88 million for renovating the headquarters of the Public Health Service.
• $412 million for CDC buildings and property.
• $500 million for building and repairing National Institutes of Health facilities in Bethesda, Md.
• $100 million for reducing the hazard of lead-based paint.
Well, I don’t think money spent to screen and prevent sexually transmitted diseases is a bad thing. I have a degree in microbiology and public health and this is a huge problem in this country. And it will create some jobs, primarily in healthcare clinics and laboratories, but does it fall into “economic stimulus?” I dunno. I think so, but I’m biased because it would be nice if some of the jobs created went to people besides construction workers. There are job cuts all over the economy.
So it’s a hard call. It looks to me like the GOP’s issues may have less to do with “pork” than with spending they might view as being more policy in orientation. The sort of spending above falls into healthcare and/or public health spending, a category the Republicans think should be handled by the free market rather than the government. That might at least partially explain their complaints, assuming their complaints are actually rational.
My issue with the big stimulus package (“Hey, baby, wanna see my big stimulus package?”) is that it seems to fall into the category of an “experiment.” Nobody knows if it WILL work, let alone whether it will work. Economists all agree something has to be done, but can’t quite agree on what, and if they can’t, neither can the politicians. What worries me from that POV of view is if it’s an experiment that might fail but we have to do something, what makes the opposition think they have a clue what’s going to work?
Personally I’m a fan of infrastructure. I like smooth roads and bridges not collapsing when I drive over them.
I, too, am a fan of sober deliberation, spending money wisely for the long-term benefit of the country, and not spending a penny more than absolutely necessary.
What a shame, then, that none of that is actually happening , or anywhere near to happening, in Washington.
The new republican talking point (as seen on CNN) is:
” if you go back in time to the birth of Christ and spend 1 million dollars a day, every day until the present you would still not have spent as much as is being proposed in the “stimulus” bill “.
That is a staggering amount of money. The plan is to borrow all of it. There is no plan to pay it back, yet.
This is on top of the trillion dollar TARP fiasco that Bush stuck us with ( and look how well that worked).
Even without reading the fine print, common sense would suggest that this can’t be a good idea. Imagine maxing out all of your credit cards as a financial strategy. Sure if you put it in the right investment and everything works perfect it could be a smart move, but 99.9% of the time you are probably looking at bankruptcy in the not to distant future.
Rasmussen shows support for the bill has dropped to 37% and is in free fall.
Every one of our major trade partners has threatened to cut us off if the current protectionist language sticks.
60% of the “emergency” money won’t be spent for three years. What’s the rush?
This is the definition of a bad bill.
Pelosi has put Obama in a terrible position with this pig and if he is smart he will pull the plug and start over from scratch.
Most of this bill can be safely deferred to the normal appropriations process where it belongs.
Economists whom I trust, and who have seen this coming, seem to think that big stimulus is essential for recovery, albeit not the instant recovery some people seem to expect. I just want to see the deliberative democratic process WORKING to produce a functioning compromise, rather than producing a stalemate or a gutted bill that does nothing.
And hey, taxpayers are bound to get more for our money from this huge expenditure program than we got from the Bush one (a.k.a. the war in Iraq), right?
The question of whether or not the stimulus package will work is a matter of how bad the economy really is–something that nobody can know until after the recession is. We didn’t officially know that we were in a recession until December of 2008–and at that point we saw that we’d been in one for a year. This wasn’t a matter of people refusing to acknowledge the way things looked, but a matter of data being collected and numbers being crunched. What situation the economy’s in is ultimately a matter or empirical data. There is as of yet no way to quickly collect data about the current economy because of just that–it’s current. The data doesn’t completely exist yet.
Since the Revolutionary War our economy has grown on an average of 4% a year; there were recessions and booms dotting every few years but that’s the average growth rate. New economic theory wants to make the recessions and the booms smaller to keep the economy growing at a more stable rate because what is best for the economy is stable growth. The government, however, can do too much–if there is too much money in stimulus packages given or the Fed cuts the interest rates too much then the next boom will be huge because of an over-abundance of money in the system, which will result in the next recession being worse. Playing at economics like we do in our country is a delicate dance–trying to help out while we could be doing more harm than good. And the fact is that there is no way to know how much is too much, and how much is not enough. Maybe the stimulus package will help, maybe it won’t–only time can tell.
“Why not cut corporate taxes by 50%?”
To what end? Firstly, they only pay tax on their profits, which they may not have. Companies aren’t spending the money they have now, because the future is so uncertain. Any money saved from tax cuts would probably either sit in the company’s cash-equivalent money market instruments, or be taken out by executives and sit in their personal cash-equivalent money market instruments. Net economic effect: small.
“Why not just step back and let a recession recover on its own?”
Japan in the 90s.
Here are some of the GOP identified “pork” from CNN.com that IMHO are wrong for this package
• $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Department of Energy defunded last year because it said the project was inefficient.
• A $246 million tax break for Hollywood movie producers to buy motion picture film.
Among others…
Now, I’m not saying that some of the things listed are bad ideas, far from it, but I think we can all agree that producers can buy their own damn film and power plants that don’t work can stay shut down for now.
I guess my whole point ” for now” This bill isn’t the place for “gee, wouldn’t it be nice if we could…” spending.
Let’s stay on topic and only have items that directly benefit taxpayers in the way of generating jobs or lessening tax bite or even, say 100 billion paid directly on delinquent mortgages before foreclosures increase even more than they have. (not to the banks where it seems to disappear) After we’re a little more stable, then fund the computer upgrade at the Farm Service agency.
Pork or not there seems to be quite a bit of ” pet project funding going on here which isn’t helpful to the problem.
Jeff S. who’s glad he has a job…
.
” Imagine maxing out all of your credit cards as a financial strategy. Sure if you put it in the right investment and everything works perfect it could be a smart move, but 99.9% of the time you are probably looking at bankruptcy in the not to distant future.”
I’m not sure the Republicans want to push this line. Many people are put in exactly this position by healthcare crises because we don’t have universal health care.
Max out your credit cards? If it’s the only way to pay for the heart bypass you just had?
It’s different for countries than for people. The viable time scales are longer, for one thing. The UK is still paying bonds taken out to pay for World War 1.
As Mr. Scalzi noted, the GOP’s concern about paying for debt is awfully quaint, since George W. Bush increased the national debt by FIVE trillion dollars during his tenure, during supposed boom times, with nary a peep from the GOP.
Now that we’re in a crisis the GOP wants to throttle back on spending that’s actually needed? WTF? They’re like parents of a baby, who blow their paycheck on lottery tickets and then try to get through a weekend with two diapers in order to save money.
It’s too much of a disaster to avoid passing something, so something will get passed. I only hope that it has accountability provisions within it to prevent what happened with the payments under Bush–basically, money handed over to companies to immediately put into the pockets of those who created the mess without fixing a thing.
Healthcare is good. Infrastructure is good (especially levies!). There are a lot of ways to create jobs, however. I don’t think that they exact items chosen matter so much as ensuring that some sort of accountability is tied to the funds.
Of course, sometime very soon, the government must wake up do something unpopular (raise taxes and/or cut social security) to pay down the mammoth deficit that we’re facing, but I don’t think that that time is right now.
I don’t guess anyone ever wants to have to pay a bill “right now” though….
If so, I personally think this is an interesting strategy for a party that was defeated on the basis of its inability to comprehend what’s actually happening to the economy (and the people in it),
I know that in the several months leading up to the election, the economy really took center stage, and I have no doubt that it contributed to the size of the Democratic win in November, but I feel obligated to point out that the Republicans were defeated “on the basis of” the horrible fuck up which was the war in Iraq, and general sliminess/corruption. The economy was very much a johnny-come-lately, and it would have been a very different election if Bush’s job approval had been at 60% (or, heck, 40%) until the economy started to nose-dive.
Jeff S. writes: “but I think we can all agree that producers can buy their own damn film”
Well, that might be the first instinctive response. But how many billions of revenue – much of it from overseas – would come in from productions that used the film?
We don’t have enough industries with a big export market. It arguably makes more sense to give Hollywood big tax breaks than to give tax breaks to companies whose business revolves around selling items manufactured overseas.
If there’s a basis for complaint, it’s probably that it’s silly because production is moving to digital media, so why buy film?
(I wouldn’t be surprised if the idea was to benefit Kodak, that manufactures the increasingly obsolescent film stock, rather than Hollywood itself.)
The Republican leadership has said repeatedly they are willing to go along with a stimulus, just not the liberal wish-list that is the House stimulus package. The Democrats have acknowledged they don’t have the votes in the Senate to pass the House package. So, now they will compromise, and probably remove a bunch of the porkiest products, and take out much of the spending that takes more than two years to get into the economy. That sounds like about as good a process as we could hope for. We are likely going to get actual, bipartisan, compromise out of this process.
Although I do expect a compromise stimulus of about $600-750 billion (about half tax cuts) will pass, I think we’d all be better off if it didn’t. And we be even better off if Obama and Congress announced that they were done messing around with the economy, except to rewrite regulations (like the problematic mark-to-market). It’s uncertainty caused by government intervention that has so screwed up the market, and we need to get back to relative certainty. I don’t know if I need to start saving to pay off the $30k that my family will owe just from the stimulus bill or not.
This certainly ought to put an end to efforts to kill the estate tax.
Ought to. It won’t, though. The GOP will move heaven and earth to make sure the wealthy titans of Wall Street who got us into this mess are able to found permanent aristocratic dynasties.
As a libertarian, I got no taste for who’s socialistic policies are “better”, but I would like to point out that the Democratic Party was in charge of Congress before the start of the recession, and Bush didn’t often veto…
“The Democrats have acknowledged they don’t have the votes in the Senate to pass the House package.”
Except they do. Apparently the Dems can, through Senate rules, declare that the stimulus bill is a budget reconcilliation bill, which only requires 50 votes to pass.
Since the stimulus is mostly short-term spending, apparently this would be kosher. But the Dems have said they don’t want to do this. I think they’re in a sado-masochistic relationship with the GOP, and just get off on being beaten.
Author’s Note: This turned into a rant at some point, feel free to skip
rant on:
I gotta say, when my local Democrat congress-critter, Alan Boyd, voted against the stimulus, I think maybe there are issues beyond just Red v. Blue. While Boyd is technically a Blue Dog, he’s pretty firmly entrenched in a Yellow Dog Democrat (as in, ‘the Democrats could run a yellow dog in that district and he’d win’)district. I don’t think it would have made the bill worse to get him on board.
I’m now officially concerned that the House leadership is a bunch of losers. Seriously, how frickin’ hard can it be to get these guys to march on the party line? How hard can it be to find at least one GOPer looking to toady his way into the good graces of the Obama administration.
The only person who looked good in that whole deal was the Minority Whip — who did his frickin’ job.
Also, put me in with the crowd who thinks the government would do better to mail $3000 to everyone with a Social Security number instead of trying to shove this Christmas Tree of a bill up our collective taxpaying ass. I trust Congress to f*** up the procession at a one car funeral, and other people apparently trust them to allocate $900B in less than a month. What could possibly go wrong?
I’m so glad we voted for change. A pox on both their houses. Feh.
Donut writes: “As a libertarian, I got no taste for who’s socialistic policies are “better”, but I would like to point out that the Democratic Party was in charge of Congress before the start of the recession, and Bush didn’t often veto…”
Ah, yes, so the Democrats forces the entire economy from boom to bust in less than a year, and the bust had nothing to do with, say, Bush’s SEC head changing a rule in 2004 that let the big Wall Street investment banks crank their leverage way up from the prior 12-1 limit. Lehman levered up to 30 to 1, and at one point Merrill Lynch was up 40 to 1.
Clue: If a bank’s assets are leveraged at 30 to 1, a mere 3% drop in the value of the assets wipes the bank’s capital out.
This had far more to do with the credit crisis than anything the Democrats did in 11 months in partial control of Congress.
I’m more than slightly amused at watching people bash the Republicans for acting, and spending like big Government Democrats while cheering on the biggest and potentially most irresponsible spending spree the Democrats ever dreamed up.
Go lemmings go!
Krugman (Nobel prize…) and others seem to be saying that it’s nowhere near enough, and the Republicans seem to be pretty consistent in their goals of sending as much money as possible to their base (rich folks) in their continued unfounded belief that trickle-down economics are real.
The whole thing is getting bogged down as the Republicans insist on tax cuts (which will be vastly less effective than stimulus…) or stimulus directed towards the wealthy as much as possible. The Democrats are afraid of going too big because despite overwhelming majorities, they’re compulsively frightened of the Republicans; as a result, they haven’t gone big enough. Finally, the financial crisis is distracting and confusing everyone.
As always, actually listening to economists is right off the table, but the finance scum who got us into all this are being offered more money.
Apologies for excessive links…
http://www.nytimes.com/2009/02/04/business/04leonhardt.html?hp
http://www.nytimes.com/2009/01/26/opinion/26krugman.html
http://www.nytimes.com/2009/02/02/opinion/02krugman.html?_r=1
“It does seem of late that many of the GOP’s ideas, particularly the economic ones, have not been as good as they think they are. Which is why they find themselves in the position they do now.”
Yeah, like that attempt to rein in Fannie and Freddie a while back. That was just plain stupid.
I find it amusing/disturbing that it seems to be a given in most circles that the US government controls the US economy. When did we start living in a Planned Economy? When did we start being OK with living in a planned economy? Those have a pretty long history of failing miserably, yet more Government control is the answer? Stop the bus, I want off.
Not sure what you’re referring to on the first half of that flyfish. Perhaps the bank bailout? I think more people were bashing the republicans for putting zero oversight and no strings on it.
Anywhat, am I the only one scared by this?
http://www.asce.org/reportcard/2009/
according to the American Society of Civil Engineers, the current cost of needed upgrades and repairs to our infrastructure is estimated to be $2.2 trillion. That’s 2.2 million million, 2.2 terrabucks. Why have we let our home crumble around us?
Skar:
“Stop the bus, I want off.”
Where will you go?
“Except they do. Apparently the Dems can, through Senate rules, declare that the stimulus bill is a budget reconcilliation bill, which only requires 50 votes to pass.”
I believe the problem was not passing the bill once a vote came up, but having 3/5 majority needed to call for cloture was the problem. It doesn’t matter if you have the 50 votes, if you can’t stop a filibuster, it’s as good as not having the votes.
The big problem is that on top of the economic slowdown, we also have these banks that are larded up with trillions of dollars “worth” of garbage on their books.
Giving $3,000 to every taxpayer wouldn’t help with that at all, so the credit markets would remain relatively frozen.
It’s likely that the taxpayer will end up buying the garbage assets for too much money, giving the banks a massive windfall, and then the taxpayers will take a massive loss down the road.
It is occasionally said that we need a new RTC, like after the savings and loan debacle, to take on the assets and sell them in the future. That worked out okay for the S&Ls. The problem is, the RTC didn’t BUY the assets. They took them, after the failed S&Ls were shut down.
The plans being batted around now do not involve Citibank being shut down and killed before the government takes on their trillion dollars of bum assets. So the taxpayers are going to get soaked, and that’s on top of cost of the stimulus bill.
“It doesn’t matter if you have the 50 votes, if you can’t stop a filibuster, it’s as good as not having the votes.”
The Republicans are welcome to filibuster it. I’m sure they’ll look great on the CNBC split screen next to the plummeting S&P 500 graph as the markets freak out.
While we were studying Marx in my high school history class, our teacher confided in us that he believes that some day, the modern proletariat is going to rise up against the upper class. With the rich getting richer and the poor [still!] getting poorer, I’m wondering how far away that day is…
I wouldn’t wait up nights.
Me, I concentrate on trying to get rich. Might happen, might not, but it’s really always seemed like the only game in town. Doing it doing someting I love? Harder, but worth it.
I don’t necessarily mind the porkulus bill for its own sake.
I mind the fact that there doesn’t seem to be much thought going forward on how somebody will REGULATE this money once it starts going out so as to ENSURE that it’s being spent the way it was tagged to be spent, and that it’s not being frittered away or wasted or “disappeared” as it travels down the branching roots to the ultimate endpoints. This bill has GRAFT written all over it, and I see no reason why hundreds of millions of it, if not billions, won’t eventual come up ‘blank’ in a few years. As in, unaccounted for, gone, fwoosh, out the door and nobody knows where it went or what it bought.
And of course, will anyone be held accountable when that happens?
(puts head in hands)
“This bill has GRAFT written all over it, and I see no reason why hundreds of millions of it, if not billions, won’t eventual come up ‘blank’ in a few years. ”
That’s standard operating procedure at the Pentagon, every year.
The more that leaks out about what’s in this ‘economic stimulus’ bill, the more I’m wondering which is going to look more porkly…the guy who’s eating nothing but bacon for a month or the ‘economic stimulus’ bill.
If you want to fix the roads and bridges, pass a bill to fix the roads and bridges, but don’t call it a stimulus bill because there’s already taxes being collected to keep the roads in repair. Isn’t it strange that small business accounts for 80% of job growth and this bill devotes less than 10% of the money for small business? What we really need in Congress is single item legislation so the politicians on the Hill can’t dazzle the masses with smoke and mirrors.
I say put Barney Frank in charge, he started the mess, might as well see it through to the end!
Scalzi wrote: a little like a drunk driver deciding it’s a brilliant PR move to wrest control of the ambulance taking him and the other wreck victims to the hospital from the EMTs driving the thing.
From the comments on this thread, I think the drunk driver is denying the existence of a car wreck while claiming that Ted Kennedy was driving the car the whole time. Perhaps wrecking the ambulance will save the wreck victims from socialized medicine?
What I find most problematic about modern partisanship is that each side has its own set of facts, not just its own set of interpretations.
Come on baby squeal for me squeeeeE! squeeeEE! squeeEEE!
What the expletive deleted happened to all those tax dollars that they just gave away? Oh, that’s right, they didn’t put any oversight into that bill.
I also like the idea of infrastructure work. That is what taxes are supposed to do. Taxes are not meant to bail out failing buisnesses. Specially not buisnesses that are highly speculative like many banks have become. I mean come on, isn’t a big part of a banks job to not loan more money to the borrower than the borrower can pay back? The reason I bring that up is that for the most part the very same people who gave away a big ol chunk of my tax dollars a couple of months ago are now looking to give away even more. What are the odds that they will do any better the second time around.
Besides, what’s everybody freaked out about? So real estate prices are crashing. That’s what happens when there is hyper inflation in any market. It wasn’t that long ago that I was reading about historic low intrest rates and housing prices climbing very quickly. My place for example, it’s “value” went up over four times in about six or seven years. I pretty sure that’s just silly. Even here in Socal. It’s down to about three quarters of that now. But that is what everybody is freaked out about and so the dominoe’s fell. Sigh.
Maybe I should be trying to figure out how I can get some of this $900 billion.
900 billion. I’m not sure I can even grasp that number.
Rembrant: pay Scalzi one dollar every second. You will have given him 900 billion dollars by July-ish of 2037. It will, sadly, have been spent entirely on double-doubles.
You could also check out the megapenny project to help visualize it:
http://www.kokogiak.com/megapenny/
ACK, I’m stupid, that was 900 million,
you would have paid him 900 billion dollars by around January of 30529.
900 billion days ago the first complex eukaryotic cells are believed to have formed, based on biochemical evidence.
900 billion hours ago there were dinosaurs
900 billion minutes ago Rome was still pretty big.
Can you scratch the last one, I am embarrassed at my horrible error! Hundred million = 10^8, hundred billion = 10^11
again http://www.kokogiak.com/megapenny/ if the other gets deleted (please do!)
This is the “sausage-making” part of the legislative process, so of course it’s messy. The GOP can legitimately claim that the “health initiatives” in the bill are not legitimate economic stimulus, since, while they provide jobs, they don’t physically rebuild the infrastructure or retool the economy for the future. But underneath it all is a lot of posturing on both sides. Outside of the broad policies of building infrastructure, alternative energy and restoring credit liquidity, it’s all just pork-barrel disguised as jobs programs. Most of it really is just for the lobbyists that have traditionally supported the two parties.
The GOP likes the housing tax break because realtors and developers support the Republicans; the Democrats want the health-related stuff because they want to advance those causes, even though (for example) the bang for the buck on things like smoking cessation and lead paint remediation has gone down because most possible gains in those areas have already been made. Or for STD screening, it’s part of the old ideological battle about sex between the two parties. The Republicans cut funding for these programs when they’re in and the Democrats restore funding when they’re in. Proving once again that Washington is full of yo-yos.
And of course, the GOP prefers to structure its gifts to its lobbyists as tax breaks, while the Democrats prefer to structure theirs as research studies or subsidy programs.
On the other hand, as long as they are generating SOME kind of productive work from the programs they fund, there will be a legitimate economic stimulus. We aren’t at the point yet where the government needs to pay people to “dig ditches and then fill them back in”, but if we let the legislature stand and deliberate long enough we could be. It would never have happened politically, but I would have liked to see a two-part stimulus with a fast track bill for core programs and a second bill that is reviewed more carefully for secondary concerns. The problem is that the secondary projects are pre-conditions set by various members for giving their yes vote on everyone else’s projects (as well as the President’s).
“while they provide jobs, they don’t physically rebuild the infrastructure or retool the economy for the future. ”
That isn’t required for it to be called ‘stimulus’. It would be stimulus if you were paying millions of people to dig holes and fill them back up, 40 hours a week.
It would be really poor stimulus, but the workers would have money to spend, and they’d need lots of shovels.
The point of stimulus is to have the Federal government paying for goods and services when states, consumers, and businesses are not spending.
It’s *very useful* for it to go for infrastructure, especially when such work has been too long deferred, as is the case now. But it isn’t essential.
Doh, should have read Bozo’s full comment.
Mr. Scalzi,
Call me a cynic, but the fact that 60% percent of the money won’t be spent until 2010 points to an obvious conclusion; the “stimulus” is designed to reward political friends and allies while handing out goodies to the electorate just in time for the 2010 elections. All this borrowed money will get injected into the economy at *juuuust* the right time, the dinosaur MSM will create alot of chatter about the economy recovering(while ignoring the added burden to our great-grandchildrens’ tax bill and which politically connected companies are getting their hands on said stimulus funds) and creating the perfect opportunity for the Dems to claim credit for the economy. Anybody notice that during the 2000 election the signs of the dot-com bust were all around us, but the MSM ignored any serious reporting on it in hopes that His Gaianess would get elected?
Jon@#14: Actually the corporations pay income taxes on their revenue earnings. They can write off certain things and in some cases get away with paying zero tax due to the montrosity known as the Federal Tax Code, but there is no “profits-only” tax on business. Japan’s basket case of an economy in the 90’s was a result of the government and central bank propping up financial institutions/banks and big companies because they thought they were “too big to fail”. (Gee, why does that sound familiar?) and those companies just sat on the money (and unlike the current mess) did not write down their losses.
BrianH @# 45: “You will have given him 900 (million) dollars by July-ish of 2037. It will, sadly, have been spent entirely on double-doubles.”
You say that like it’s a bad thing.
ytimynona, JS @ #34,35: Well, it’s a low probability, but a large downside. We’ve already established that with his “waiting for my driver” and all, JS will be the first up against the wall when the revolution comes.
Christopher Schaffer @ 50 – “cynic” isn’t the word I’d reach for to describe you.
I’d suggest trying to be a bit more cynical about your chosen news sources.
I’m not as worried about what’s in the package as I am about the way it’s being funded. As with the TARP package, the government is going to be printing new money–a lot of it. This scares the crap out of me.
Christopher @50: ” Actually the corporations pay income taxes on their revenue earnings. They can write off certain things and in some cases get away with paying zero tax due to the montrosity known as the Federal Tax Code, but there is no “profits-only” tax on business.”
“Revenue earnings” is nonsense.
At the risk of citing Wikipedia, “Corporate “income” tax is not a tax on corporate income. It would be more accurate to call it a corporate “profit” tax. Corporate “taxable income” is that which remains after most business expenses have been deducted.”
Actually, I think you’re not thinking it through.
CBO says that 78% of the package would be spent within the first eighteen months from package. That would be 2009 and 2010. Fiscal year 2010 and 2011. Dunno about you, but I happen to know that while tax cuts can be immediate, appropriating money, prepping budgets and hiring the people from that money takes time, particularly if you’re following established procedure like taking bids, doing due diligence, hiring the best people, etc.
“• A $246 million tax break for Hollywood movie producers to buy motion picture film.”
Yes, this one is my favorite. No value at all to the American people. Actually I do not have near as much problem with the package as the full GOP list presents there are a few that cause head scratching. Of course pork has been a problem for years with both sides. But this pork, like the lobbyists are the most recent examples of Obama realizing he will not be quite the agent of change that he had hoped.
2% pork is a problem, eh?
John H @ #38,
Sadly, yes. The Pentagon is a frequent culprit when it comes to seeing money “lost” or blown away in fantastic quantities for shit that doesn’t do anyone any good. Speaking as an Army man, I’m still livid over how much cash the Pentagon has dumped into the B-2 bomber and other Air Force toys when what’s clearly needed at this point in time is raw funds for re-activating some of the infantry divisions that Clinton drew down. We just don’t have enough manpower in the Army — across Active, Guard and Reserve — to do all the jobs being asked of us without it wearing things out. Equipment and men both.
The need for oversight in government spending at all levels, seems paramount in my mind.
From my small world I can tell you this. Having owned my own company for 17 years and typically had no less than 6-8 employees. I find it easier to keep my staff if I am allowed to keep the money we make instead of sending it to the government. So far I have gone without rather than let good people go but a few years ago it was close. Reality hits you hard when you find out you can pay uncle Sam or your employees (not including yourself) but not both. Uncle Sam gets very vindictive when you ask him to be patient.
I have employees with small children trying to buy a home right now as the work is winding down. It scares the hell out of me that I may have to tell someone to go home without a job. I’ve been there and I know how it feels.
Yes, you can thank W, a Democrat controlled congress and Republicans without balls for being extremely fiscally irresponsible. I just have a hard time believing the government is here to fix things no matter who is in control.
Slam me if you want but that is one story from the trenches.
So the choice is voting for something that you know will fail (and probably make this worse) and saying “well I tried”, or voting no and saying “I told you so” when the inevitable occurs.
Of course, the third option is having the intellectual and political substance to mount a coherent, principled opposition to those parts of the package they think don’t work, put up amendments accordingly and gather support. But please don’t try and tell me people whose fiscal conservatism was most conspicuous by it absence over the last eight years, have suddenly had a Pauline experience on the way to work.
Just because the overwhelming majority of Congressional Republicans have a credibility problem of their own making, there’s no need to compound it with blatant and breathtaking cynicism.
Well, for the record, I was attempting sarcasm. I was attempting to try to get your “political” posts off of periphery “issues” and into topics that really do need to be discussed: to the extent you want wade into those waters, get to meat and not nibble the edges. That’s all.
So everyone wants money to get the economy moving. Everyone wants a bailout. But who is going to bailout the Government? And what price do they exact for doing that?
I have no problem with Democrats promoting Keynesian models while Republicans promote Supply-side economics. Frankly I think both are needed at this time.
But another Trillion dollars? Really?
Frank:
“I was attempting to try to get your ‘political’ posts off of periphery ‘issues’ and into topics that really do need to be discussed: to the extent you want wade into those waters, get to meat and not nibble the edges. That’s all.”
Well, Frank, please look at the title of the site, if you would, and remember that what I write about is whatever I feel like writing about, regardless of whether anyone else thinks it’s important or frivolous or not. I consider requests, but no one gets a vote. You have your own site; talk about whatever you want to, however you want to, there.
[Deleted for its obnoxious trollishness. MiniTru, if you want to try again, dial down your “I’m an asshole” knob to about 3 or 4, and make your point without personal attacks. Good luck!]
Scalzi
Well, Frank, please look at the title of the site, if you would, and remember that what I write about is whatever I feel like writing about,
I know. And notice I used the word “attempt”. You are also free to ignore me. But just so that this particular entry remains on topic (and because I didn’t have time to write more before), let me get back on topic.
I think that it’s pretty clear that some filtering needs to be applied to the “Stimulus” package. Here is how I would filter
1) All recurring spending needs to go. Anything that commits the government to long-term recurring costs is not stimulative by definition. All spending in this package should be restricted to finite expenditure. This is the Keynesian part.
2) All spending that has a policy effect should be removed from the bill and considered separately. The health-proposals noted by Mark Terry in #8 are good examples of things that may be a good idea, but should not be part of the “Stimulus” package. If after all the help to the economy is done, if we still have money left over (hard to believe, but…) then these should be considered as separate spending bills.
3) Because spending noted in 1) will end, there needs to be something on the back end that will continue to employ people long term. The way to do that is the Supply-side part: cut taxes in such a way as to encourage business to expand and hire people.
President Obama I think had it right: about 40% in tax cuts and 60% in temporary work-projects. I think that if this is done you will have bi-partisan support.
On the political level, Obama knows that without bi-partisan support, Democrats will “own” the result. If it works, fine, but if it doesn’t, it will be disastrous for them in the mid-terms.
It’s not that the GOP doesn’t know what to do with economic policy, it’s just that Bush and company defecated all over core conservative economic principles like: cut taxes, cut waste, shrink government (not grow it, stupid). Whether they did this to pander to the center/left or because they lost their collective minds, I don’t know. But I hope that the tattered remnants of the GOP are able to get it together and continue to stand for fiscal responsibility. You’ve already read it: don’t bundle in your special projects into an economic stimulus package. Create legislation that will actually stimulate the economy by creating jobs and putting money in the pockets of the citizenry. Seems pretty simple to me. It also seems obvious that the Dems are intent on cramming lots of other things into the bill because, well, they’ve had to suffer under the Bush regime for 8 years and dammit, now they are going to run things their way. I can certainly understand this position, but I think they’ll get plenty of chances to fund contraception and replace lightbulbs and such. Actually, I’m not against either of those things. I just think that IF we are going to have an economic stimulus package, it should be tailored to just that. If it doesn’t immediately get cash flowing, save it for another bill. The Dems have at LEAST 2 years of uber-power in them, plenty of time to get those things shoved through. I guess we’ll see what happens.
There are three major scholls of thought when it comes to Ecconomics.
The Keynesians
The Chichago School (Friedman)
The Austrian School (Hayek)
They Keynesians think that government spending can be an ecconomic stiuluous. One stimulates the ecconomy by getting money moving again. The phrase “velocity of money” comes from the Keynesians. The argument against this is that it is simply robbing “Peter to pay Paul”, it can appear to help in the short run, but it makes things worse in the long term. –
The Chichago school will say that government spending destroys just as many jobs as it creates. Paying 10,000 people to build roads means you have to generate enough taxes to put 10,000 other people out of work. If however, you pay those folks to build actual infrastructure, then you create jobs in the long term, as the infrastructure creates new opertunities and efficiencies. (Most Democrats appear to follow this school of though
The Chiachago school basically says that building the Interstate Freway system created zero net jobs directly. However, it did create jobs in the trucking industry, but for every person you pay to build a road, that’s one more person you put out of work somewhwere else. (Many Republicans, and many Democrats follow this school)
The Austrians (think Ron Paul) say that basically all government spending makes the ecconomy worse. Ecconomic growth can only be caused when capital is acumulated so that it can be invested in either new business ventures or in capital equipment, since government spending must be paid for either through taxes or inflation, it prevents the accumulation of capitol, thus hurting the eccomomy. (Libertarians, and a handfull of Republicans follow this school)
That’s why I said above that if one “knows” the stimulus will fail, then one should vote agaisnt it. To an adherent of either the Chichago or Austrian school there is no “risk that they Keynesian approach might work”, to them, it is self evident that it has to fail.
It’s almost like the three schools form an orthoginal basis set. They can’t overlap by definition.
Now any sufficently large system (and 3-million people counts as large) will display behavior that is a combination of basis states, so real ecconomic behavior is bound to be a combination of all three schools of thought. Though I think history has shown that the Austrians are right on a lot of things.
I just realised that I have now written a quantum mechanical aproach to ecconomic theory. This probably means I need more sleep.
Scalzi @ 30
“Where will you go?”
Excellent point. I would rather tell the drivers that the road they’re on ends at a cliff. I even have satellite imagery of the buses that preceded us on this road smashed and blackened at the bottom of said cliff. More imagery is available of other buses in freefall at various points between the top and the bottom. They’re not listening. They’re nationalizing businesses. They’ve upped the proposed government spending to the point where $20 billion for their buddies can be seen as negligible (@2).
At this point I’ve started entertaining a desperate hope that Pres. Obama and the Democrats are, somehow, despite my beliefs to the contrary, right.
SubOdeon @ 37:
Kinda like the $10 billion or so in cash that went missing in Iraq, not to mention all the rest that went to waste in various ways? We blew trillions there to very little purpose. (Though we did hand Iran a nice oil-rich client state.)
But now as our economy goes down in flames, we need to be careful and deliberate about how much we should be paying for firefighting expenses?
Frank @ 64:
Agreed on point 1. But your point 2 seems to assume that policy expenditures are not stimulative. That doesn’t seem like a valid assumption. I can understand objecting to them because you differ on policy. But it’s inaccurate (and/or disingenuous) to say “We should spend on stimulus, not on building government health labs.” (Or schools, or whatever policy related expenditures you’re objecting to.) So long as the policy spending is stimulative (and most of what’s being discussed is) it seems fair game. Certainly there’s no reason to eliminate it from the bill completely.
So most of us admit that nobody really “knows” the answer to this, but for some reason we simply MUST DO SOMETHING to the tune of a trillion dollars or things won’t get better.
At 50 years old, I’ve lived through several recessions. While there was always some kind of governmental “fix” attempted, there’s no evidence that any of them helped. Recession is the economy’s way of fixing imbalances. The recession IS THE FIX. It’s painful, but needed. The only thing the government should be doing is alleviating suffering by extending unemployment benefits, and additional relief provisions. The rest is garbage.
Mark Horning @66
Now any sufficently large system (and 3-million people counts as large) will display behavior that is a combination of basis states, so real ecconomic behavior is bound to be a combination of all three schools of thought.
Some of us remember the awefulness of the economiy during the Carter years.
The remedy that Reagan employed was to both increase Government spending and cut taxes (and raise interest rates to tamp down inflation which was a problem then but not so much now. At least not yet.)
The spending came mostly for the military and military programs as part of his buildup that would eventually bankrupt the Soviet Union. Spending on military infrastructure (ship, planes, etc) created tens of thousands of high paying jobs in engineering and manufacturing as well as a service economy supported by it. And many civilian applications of military technology was also created (such as the now ubiquitous GPS system).
Given our current situation, President Obama could do worse than repeating that strategy.
“Mind you, given the last eight years, I find the sort of indescribable richness that one usually ascribes only to super-moist chocolate fudge cake in the idea of the GOP suddenly acting as if they’re grown-ups when it comes to federal-level fiscal responsibility.”
Bingo! That is why I am not a Republican. I envy you your sensation of indescribable richness as it only leaves me disgusted.
Trey
Mark, thanks for the info, that was interesting and taught me some stuff. Outstanding.
Trey
Jon Marcus,
I’m not sure what to do with that, other than to state that shitty spending and unaccountability is fucked up. Regardless of whether its over in Iraq or here at home. Our elected leadership has been piss-poor for a DECADE, when it comes to being responsible with money. I wouldn’t trust any of these bozos to balance my checkbook, because clearly they can’t balance the Fed’s checkbook. Republicans and Democrats both. They’re BOTH at fault for the current crisis.
I would also go further and say that American society has an even larger problem, in that we as U.S. citizens have become used to a Debt Economy and have largely abandoned the idea that you have to save before you buy, and that you don’t have to buy what you really don’t need.
What’s interesting is that the majority of state governors, Democrat or Republican, are strongly in favor of the stimulus package, and would like Washington to stop wasting time, and send money ASAP.
What we’re seeing is two Republican parties. Ideology aside, the Federal branch of the republican party is at odds with the state branch.
John,
your little analogy has a major flaw in it. You wrote:
“a little like a drunk driver deciding it’s a brilliant PR move to wrest control of the ambulance taking him and the other wreck victims to the hospital from the EMTs driving the thing. ”
However the bill currently on the table is 100% a democrat production. Pelosi proudly excluded the republicans from having any input what so ever on the bill. The democrats have the votes to pass this marvelous bill without a single republican vote. Why should a republican vote for a bill he/she didn’t have input on and doesn’t like?
In this case the drunk republican is not trying to wrest the controls from the brave EMTs ( he is of course strapped to a gurney in the back where he can’t do anything other than complain about how the ambulance is being driven), rather it is the EMTs who are complaining loudly that the drunk is not doing enough to help them drive.
Truly it’s become a looking glass world.
“sober deliberation when it comes to money, especially in gargantuan sums, spending money wisely for the long-term benefit of the country and not spending a penny more than absolutely necessary.”
None of this happened in the run-up to Iraq. Those billions of dollars bought us lots of dead people and a couple of fabulously wealthy government contractors; but not much else. So, colour me unconvinced that the Repugnicans are doing anything other than political posturing – they’re not serious people.
Sub-odeon:
Ok, so this is nitpicky. But you said “Our elected leadership has been piss-poor for a DECADE, when it comes to being responsible with money. I wouldn’t trust any of these bozos to balance my checkbook, because clearly they can’t balance the Fed’s checkbook.” 9 years ago… the US had a surplus.
*ducks* :P
Economists whom I trust, and who have seen this coming, seem to think that big stimulus is essential for recovery, albeit not the instant recovery some people seem to expect.
You have summed it up improperly. The economists who saw this coming are the ones who are shrieking that this big stimulus not only will not work, but that it will prolong the economic contraction for years. It is the mainstream economists, all of whom denied there was any problem with the economy, who are assuring everyone that a big stimulus is needed. It is not.
Basically, the Neo-Keynesians and Monetarists first said there was no problem, and are now declaring that they know how to fix it. The Austrians were the ones warning about the credit inflation since 1996, and they are correct in warning everyone that the stimulus package will make things worse for years to come.
I highly recommend reading America’s Great Depression by Murray Rothbard. A free text is available for download at the Mises Institute. Even if you are a big fan of government intervention in the economy, the great similiarities between the Hoover administration’s reaction to the 1929 contraction and the Obama administration’s reaction to the 2008 one will not escape you.
By the way, Obama’s stimulus plan is 8.3 percent smaller in relative terms than Hoover’s 1931 plan even if it was all being spent in 2009. Which it isn’t. There is zero chance that it will work.
Josh Jasper wrote: “What’s interesting is that the majority of state governors, Democrat or Republican, are strongly in favor of the stimulus package, and would like Washington to stop wasting time, and send money ASAP.”
That’s because governors can’t print money. They are under much tighter budget constraints than the Feds are. State tax revenue is dropping, forcing governors to make big cuts, which puts people out of work, exacerbating the economic downturn in a given state.
“The economists who saw this coming are the ones who are shrieking that this big stimulus not only will not work, but that it will prolong the economic contraction for years. ”
Krugman saw it coming, and he’s pro-stimulus.
VD @ 78:
I think just about everyone would agree that purely emulating Hoover would be a bad idea. But Hoover’s failures might’ve had something to do with his trade policy (Smoot-Hawley: Fun to say, disasterous to implement) raising taxes, and his volunteer solutions to the banking crisis he faced.
Krugman saw it coming, and he’s pro-stimulus.
No, he really didn’t. In The Return of Depression Economics, published in 1999, he was mocking gold while encouraging movement into equities. Not too bright. And despite the title, in the 2000 intro he was claiming that “the risk of of an actual depression has receded by now” and “[the world] will probably not be in depression anytime soon.”
I’m far from the most prescient Austrian, but I was writing about how the end of the housing bubble would trigger financial crisis back in 2002. In 2005, Krugman was just recognizing the existence of the housing bubble…. when it was ending. Krugman’s far from the dumbest Neo-Keynesian, but he’s absolutely wrong on both the 1929-1940 depression and the present one.
Hoover’s failures might’ve had something to do with his trade policy
So, did you miss the recent “Buy America” kerfluffle that Obama (rightly) backed down on? Anyhow, imports plus exports were only $4 billion in a 1929 economy of $103 billion back then, so while the infamous tariff didn’t help, it can’t possibly account for the $47 billion contraction by 1933. The problem is resource misallocation and the government propping up unproductive organizations. If I hire you to dig a hole and you hire me to fill it in, no wealth is actually produced, even if the Treasury prints up enough money for both of us to pay each other $5,000. The same is true of us loaning each other money to write derivatives.
Hey, I’d love to be wrong. I’d love to see another boom. But the bust always follows the boom, and is of similar magnitude. That’s why the smart people are so worried… even Obama. I suspect he knows the plan won’t work, but he doesn’t have the knowledge or the courage required to stop making things worse. Can’t blame him either, since no normal politician does.
I didn’t see many comments about two long-range negative results of the stimulus package:
a.) an increase in the national debt (most of which will probably be held by foreign governments, especially China).
b.) the blow to our national currency (from printing all that money to pay for the stimulus).
Let’s remember one great thing Bill Clinton did: He paid down the national debt. The economy was in superb shape in 2000. Then G.W. Bush ran the country into the ground by trying to do for the Iraqis and the Afghans what they should have been doing for themselves.
Most of the stimulus package involves transferring the incomes of private households to government and corporate institutions, who (we blindly trust) will somehow create an economic upturn (by spending our money).
The stimulus package doesn’t even fall under the heading of socialism—it’s more like corporatism, or corporate welfare.
We are now heading for a situation where the rewards of our free market economy remain private, but the risks are socialized. (What else would you call a taxpayer-funded bailout of Wall Street investment banks?)
We can’t pin all of this on Obama. Afterall, this started with the absurd bailout of AIG last summer.
We had a huge market correction this past summer. It will work itself out in time if the government will simply stay out of the way. More debt is sure to create even greater problems in the long run.
@mark terry, #8
It’s interesting seeing the spin, that something is either stimulus or pork. Although, on the whole something that has long-term benefits for the country is probably stimulus by default. Either way, it hard to see how funding the CDC would be equivalent to a senator’s private project.
Also, John, I’m curious, what site linked in and created so many of the angry replies?
I don’t see a huge number of angry replies, personally. And I don’t think any site linked in. Whatever simply has a politically heterogeneous readership.
I don’t see what sexual orientation has to do with anything, John.
Well, see, MarkHB. That’s your problem right there.
The CBO report is here for anyone who wants the actual numbers:
http://www.cbo.gov/ftpdocs/99xx/doc9968/hr1.pdf
It’s an easy read with the numbers right up front.
If you count direct spending by the government, then they only spend 8% in 2009 and 41% in 2010. If you include appropriations, which are less obviously a stimulus, I don’t have the exact numbers handy, but it goes up to something like 50% by 2010.
Either way, it’s clear that the bulk of this bill is not any kind of stimulus. If we are still having economic problems in 2011, it won’t be for the problems we are facing right now.
Daublin, a few responses:
Those are fiscal years you’re talking about there. I’m not sure if the federal fiscal year starts in July or October, but you need to crank your calendar back a few months. If there are only 5 months left in FY2009 and the bill isn’t even on the president’s desk yet, it’s not too surprising that there won’t be much spending there.
Those numbers also look at government spending. I don’t think you’re including tax reductions in your percentages. Tax reductions are a good deal easier to get out there quickly, though perhaps less useful. (They can be used to pay down consumer debt, which isn’t especially stimulative.)
Why do you assume we’ll be out of our current mess by FY 2011? I hope we are, but don’t see any reason to assume that’ll just happen.
VD: The BEA sez ImEx was $11.5 billion in ’29. Not too surprising that pumping in a bit under 10% of GDP would be offset (or more than offset) by kneecapping more than 10% of GDP. And you didn’t even mention Hoover’s neglect of the financial crisis.
As for the “Buy American” thing, why yes I did miss it. It went by so quickly,as you pointed out. But in any case I’m sure you aren’t seriously comparing the effect of a quickly abandoned line in a single speech with the effects of Smoot-Hawley.
And your definition of “soon” seems awfully long term. In the midst of the 2002 downturn you predicted that “there can be little doubt that the implosion of the equity markets will soon be followed by the pricking of the credit and real estate bubbles.” The Dow had plunged below 7k when you wrote that. It proceeded to nearly double. I dunno if it’s fair to call 5 years and a full bull-bear cycle later “soon”.
Ed @ 83,
I largely agree with you that waving a magic wand and creating a $1,000,000,000,000 dollars out of thin air is an act of indescribable self-delusion and irresponsibility, but I can’t let this bit stand:
Dubya screwed up a lot of things, but I don’t think we can blame him for the popping of the tech bubble (the economy in 2000 wasn’t all that superb, as it turns out), nor did he crash any passenger jets into lower Manhattan. And for as big a boondoggle as his Middle Eastern Adventure has been, it will wind down. The Medicare Part D thing will not.
I’m all for pounding Dubya and the idiots in Congress for their fiscal irresponsibility, but I try to confine myself to complaining about the bits they actually control.
As to John’s earlier question about where one gets off the bus, I’ve been telling my friends that if they want to find me after 2012 or so, they should check the anchorages around the British Virgin Islands. I sure as hell ain’t sticking around the U.S. when these bills come due.
Don’t wait. Flee, you fool(s)!
The BEA sez ImEx was $11.5 billion in ‘29.
Are you sure you are citing 1929 dollars? From the US Department of State: “U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932.
Obviously, $3.7 billion is not 11.5 billion. Was there that another 7.8 billion from the rest of the world? I doubt it. Anyhow, the aforementioned 47 billion contraction cannot be accounted for by the decline in X+M.
And your definition of “soon” seems awfully long term.
Yeah, I’m often quite early on things economic. But that usually works out rather nicely, even if the wait can be a bit maddening at times. The ability to inflate one last bubble doesn’t change the fact that the knock-on effect from equities to housing to finance was always obvious. If you had the ability to trace the investments back, you could see there could be as many as 240 dollars leveraged for every actual dollar invested. That sort of thing is always going to blow up eventually, even if it takes a while.
#46 900 billion minutes ago Rome was still pretty big
It was pretty big when I was there 1.3 Mminutes ago.
(Hmm Mminutes looks like I’ve just hit the m key too many times. Checking the SI standard, the unit symbol for minute is min, so Mmin which doesn’t look any better)
Mark at 66: I guess I’m an Austrian and did not even know it. What I did and do know is that increasing taxes in any significant amount will cause my firm to cut expenses. This means that we either buy fewer supplies, contribute to fewer charities, or we either cut wages or let one or more employees go. The increased taxes are an expense that have to come out of the budget somewhere.
Squid
they should check the anchorages around the British Virgin Islands. I sure as hell ain’t sticking around the U.S. when these bills come due.
So how BVI on gun rights?
VD @ 93:
I’m actually not sure. I don’t know from economics, I just use teh google to gain a little knowledge. (And you know how dangerous that is.)
But their GDP number was the 103 you mentioned, so I figured I was in the right ballpark. I didn’t read their methodology, so I suppose they might be using 1929 dollars for the GDP and current dollars for import/export numbers. But that’d be pretty weird.
Here’s the table I was reading. (Assuming the link makes it past the moderation filter.
stimulus packages are very helpful for kickstarting the economy~;”