I can look up in the previous Redscape, but the three of you brought into question my compassion, and compared it to your perspective of Christianity. Neither here nor there. I am a big boy, and can handle criticism.

Do you think that Welfare recipients should have to pay with work hours provided to receive benefits? Should they have to be drug tested, as military members were? Shall we make more similarities with the military member?

First, I don't think I objected to welfare recipients working for the money they receive. The important thing is that they are getting the money they need to get by--they can't complain if reasonable strings are attached to getting that money.

Since we have been talking a bit about Keynesian economic, I wanted to first reference a recent CBO report on the effect of the stimulus. The CBO estimates the following effect of the stimulus package just from January, 2011-March 2011:

(1) GDP was raised between 1.1 and 3.1 recent percent
(2) Unemployment was lowered by .6-1.8
(3) Employment was increased by 1.2 to 3.3 million
(4) Increased number of full-time jobs by 1.6 to 4.4 million jobs

http://www.cbo.gov/ftpdocs/121xx/doc121 ... 5-ARRA.pdf

I would not call that a de minimis impact.

For a look at what happened during the depression take a look at Roosevelt's budget deficits and GDP during his time as president:

Year GDP (in billions) budget deficit % GDP

1934 66.0 -4%
1935 73.3 -5.9%
1936 83.8 -5.5%
1937 91.9 -2.5
1938 86.1 -0.1%
1939 92.2 -3.2%
1940 101.4 -3%
1941 126.7 -4.9%
1942 161.9 -14.2%
1943 198.6 -30.3%
1944 219.8 -22.7

Source: http://www.economics-charts.com/gdp/gdp ... html#table & http://www.whitehouse.gov/omb/budget/Historicals/

Note how the economy contracted after Roosevelt cut federal spending after he was reelected and how the economy expanded after massive government spending during WWII.

Currently, our deficit is around 10% of GDP which is not even close to what we spend during WWII to get out of the only comparable financial situation to the one we are now faced with. Given treasure bond yields are the lowest in 50 years (indicating that people are dying to give us money) why wouldn't it make sense in the next couple of years for a massive infusion of government money on the scale of WWII (say several trillion of stimulus spending) to jump-start our economy? Clearly, cutting federal spending when our economy is still sputtering can only mean an ever worse economy, resulting in high deficits in any case. Even the modest stimulus package done so far has been shown bt the CBO to have a significant effect. When money is being given to us so cheaply, it makes sense to use it get out of these the economic downturn we are turn we are in right now. How we can turn this around when with less government spending is beyond me, given that businesses are not going to invest or hire employees until they see the economy turn around and consumers, fearful of losing their jobs, are going to hold on to their money.

I think you need to read this, Freeman.

http://www.heritage.org/Research/Testim ... lus-Failed

freeman2 wrote:First, I don't think I objected to welfare recipients working for the money they received. The important thing is that they are getting the money they need to get by--they can't complaint if reasonable strings are attached to getting that money.

Since we have been talking a bit about Keynesian economic, I wanted to first reference a recent CBO report on the effect of the stimulus. The CBO estimates the following effect of the stimulus package just from January, 2011-March 2011:

(1) GDP was raised between 1.1 and 3.1 recent percent
(2) Unemployment was lowered by .6-1.8
(3) Employment was increased by 1.2 to 3.3 million
(4) Increased number of full-time jobs by 1.6 to 4.4 million jobs

http://www.cbo.gov/ftpdocs/121xx/doc121 ... 5-ARRA.pdf

I would not call that a de minimis impact.

This is all well and good, but how much impact do one-time gifts to States have on their ability to keep cops, firemen and teachers employed? Remember? That was a big selling point.

Furthermore, like Cash for Clunkers, which drove up the cost of used cars, we cannot know what the unintended consequences of the Stimulus were. There are just too many variables to know, right now, exactly how successful it was.

Here's what we know without a doubt: it didn't do what the President claimed. We also know it did not turn the economy around.

So, no matter what the CBO says (and they have already changed their opinion--as noted in your link at the end), the Stimulus failed to do what it was supposed to do.

You can keep posting about what a conservative FDR was. That's just wrong. The fact that we are now about to pay for his largesse is an indication that he's not a conservative at all. He planted a time-bomb based on false premises. It's about to go off.

Of course, living in CA, you are experiencing the joys of liberal governance firsthand. Why you want to inflict that on the rest of the country is beyond me.

steve

Based on raw numbers, Sweden.

For the record Steve, Sweden has a military force active and reserves equal to 28.2 personnel per thousand population.
The US active and reserves is 9.8 per capita.

http://en.wikipedia.org/wiki/List_of_co ... _of_troops

ok, ricky, that's all nice and fine, should we pit the two against each other and see? How many super carriers do you have, how many aegis cruisers, how large is your air force. Oh hell lets go head to head and see who wins, after you see the finale of that "little" battle then maybe you will understand the difference between Sweden's defense and that of the US.
I can't really believe you are even trying to compare, sometimes percentages are good in this case they don't tell the story, now do they?

Well I read it, Defiant. The statement in the article that government spending has no net effect on private demand is provably false. Let's say the government decides to buy new military aircraft. As a result, Lockheed and other military contractors hire several thousand workers. Those workers get paychecks, they spend money, demand goes up. The government supplies the needed demand for the product (aircraft), which then has a multiplier effect. The problem with reducing taxes during a recession and why it is not effective is that it does not change the psychology of people. Ok a business has more money--why are they going to take the risk (before the recovery has happened), even though they have more money, to invest in more plant capacity or hire more workers? The Same holds true for consumer--why are they going to start spending more when unemployment is still high and they are worried about their jobs. Businesses and consumers will wait until the recovery starts before they spend/invest that additional money, but the recovery won't start until they spend that money (so the money just gets held). The only tax cuts you should do in a recession should be linked to increasing demand (as in cutting payroll taxes for a year for businesses who hire new workers--that will cause businesses to be more inclined to hire new workers and results in increased demand due to the drop in unemployment). Government is able to provide needed demand in a recession because it can take the risk that businesses and consumers can't.

And we can theorize all we want, but we have a clinical situation where there was low demand and massive government spending that resulted in an economic recovery in the U.S. during World War II Now of course that economist would say that would be impossible--but it happened.

rickyp wrote:steve

Based on raw numbers, Sweden.

For the record Steve, Sweden has a military force active and reserves equal to 28.2 personnel per thousand population.
The US active and reserves is 9.8 per capita.

http://en.wikipedia.org/wiki/List_of_co ... _of_troops

Click on the "Sweden" button on your page. It's not so impressive.

I already posted this:

Today, the total number of troops available to the Swedish Army after 90 days of full mobilization is about two battalions (600 troops each) and eight companies (120 troops each), totalling 2,160 soldiers and 37,000 Home Guard/Defense

And, I noted the "Home Guard/Defense" units get 8 days of training a year.

They've got some reserves. If Sweden is invaded, their best defense might be some scout troops because everyone else is a reserve.

freeman2 wrote:And we can theorize all we want, but we have a clinical situation where there was low demand and massive government spending that resulted in an economic recovery in the U.S. during World War II Now of course that economist would say that would be impossible--but it happened.

Thank God you are not an historian. If massive government spending solved the problem, then why did the Depression last so long? Let me guess: it was Hoover's fault?

And again, is there no point at which we will have borrowed too much? We're already at (basically) 100% of GDP with no end in sight.

Thanks for reading Freeman. Yes we did recover in WWII and it would work now if we had a world war and we needed tremendous goods and services to the war effort, and yes we don't have that. However, what we do have is the President belittling and regulating business to death, in other words he is not bussiness friendly. That results simply in a no confidence vote from businesses and thus they are holding their assests. If that stooge would give the slightest hint of being pro-business they in turn would start investing in their businesses as they normally do and that would bring back workers.

We still have the problem of cheap labor and as much as you and I would love for businesses to just stay with US workers they are in the business of making money so we need our gov't to level the playing field with foreign countres that love to undercut us, plain and simple, and until those two things happen we will be hurting for a while.

Actually Steve I do have a history degree....anyway, the point is that there was deficit spending by Roosevelt that did help the recovery and then he cut it after he got reelected in 1937 and the economy dipped again. But the deficit spending in the 1930s was only about 5% of GDP. The economy really took off when deficit deficit hit 20-30% during WWII.

I don't know why businesses would be so unhappy with Obama, Defiant. They have made huge profits and they haven't seen taxes go up. Regardless of whether they don't like Obama or there are more regulations, consider why would a business start hiring more workers and invest in more plant capacity (in other words gear up to meet increased demand) when there cannot be a reasonable expectation that demand will go up.? And that low demand has nothing to do with Obama.My belief is that the only way to increase demand is through a massive dose of government spending which will then have a multiplier effect. Once demand hits a certain level and businesses see the demand they can then respond to make more stuff to cater to the increased demand. But don't expect businesses to be the ones that will take the risk in a weak economy. They will simply hunker down, cut costs, and wait for the economy to turn around. Why should we expect businesses to take imprudent risks to bring about a recovery?

bbauska wrote:I can look up in the previous Redscape, but the three of you brought into question my compassion, and compared it to your perspective of Christianity. Neither here nor there. I am a big boy, and can handle criticism.

If it's the discussion I'm thinking of, there was far more to it than that. It started off with claims about fraud.

freeman2 wrote:Actually Steve I do have a history degree....anyway, the point is that there was deficit spending by Roosevelt that did help the recovery and then he cut it after he got reelected in 1937 and the economy dipped again. But the deficit spending in the 1930s was only about 5% of GDP. The economy really took of when deficit deficit hit 20-30% during WWII.

Indeed. The parallels with today are not pleasant.

But don't expect businesses to be the ones that will take the risk in a weak economy. They will simply hunker down, cut costs, and wait for the economy to turn around. Why should we expect businesses to take imprudent risks to bring about a recovery?

Indeed. And why should we expect banks to lend easily to those businesses who take a larger gamble in such a market?

Freeman, this is what I think it is. With Obamacare looming in the wings and not knowing what this anti-business President is going to do next with regulatioins especially with energy companies, they are simply holding tight. No real surprise and the consumer in kind are also holding because they are not confident in this President, don't know if they will have their job tomorrow, I know I worry so you hold tighter. Personally, there is a new clearance refridgerator at Best Buy I would liket to get, ours is limping along but I am not buying it due to the economic situation. I can't be the only one doing that. I have not had a raise in 10 years(party my fault for not aggressively looking for a new one), energy prices damn near doubled in the last 10 years, us dollar losing 20% of it value in the last 10 years, u6 unemployment rate now at 18-20%, NO I am not going risk a high value purchase.

So until this President become nicer to business and builds confidence in the people by getting that unemployment down and do something so our business's are not leaving the US we are in a doomed state, no real big surprise.

CONFIDENCE that's what needed.

Freeman:

Currently, our deficit is around 10% of GDP which is not even close to what we spend during WWII to get out of the only comparable financial situation to the one we are now faced with. Given treasure bond yields are the lowest in 50 years (indicating that people are dying to give us money) why wouldn't it make sense in the next couple of years for a massive infusion of government money on the scale of WWII (say several trillion of stimulus spending) to jump-start our economy? Clearly, cutting federal spending when our economy is still sputtering can only mean an ever worse economy, resulting in high deficits in any case. Even the modest stimulus package done so far has been shown bt the CBO to have a significant effect. When money is being given to us so cheaply, it makes sense to use it get out of these the economic downturn we are turn we are in right now. How we can turn this around when with less government spending is beyond me, given that businesses are not going to invest or hire employees until they see the economy turn around and consumers, fearful of losing their jobs, are going to hold on to their money.

It seems to me that your analogy has a serious flaw. The WWII threat was existential. It was a crisis that had to be met with all effort possible. However, it was a crisis that would end at which time the massive government deficit would go away and normal times would return.

In the current crisis, we do have a slow economy, but there is no evidence that the massive government spending will ever end. Our budget deficits are multi-faceted, but the future deficits are based on medicare promises that we cannot fulfill. There is no plan to curb these future deficits, so there is no confidence that continued massive spending will ever be curbed. WWII was a temporary existential crisis. We did the right thing. But now the existential crisis is not the unemployment rate. The existential crisis is the debt overhang.