The Republican Mis-Information Machine Wins Again

Discussion in 'Politics and Religion' started by LoyaltyisaCurse, Jun 22, 2011.

  1. LoyaltyisaCurse

    LoyaltyisaCurse IF AND WHEN HEALTHY...

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    http://news.yahoo.com/s/yblog_thelo...-jobs-gains-traction-despite-expert-consensus

    View that spending kills jobs gains traction, despite expert consensus

    Yet another poll has found that Americans are deeply pessimistic about the current state of the economy. The survey also suggests that many now support an approach to fixing things that most experts think would only make things worse.

    Just 23 percent of respondents to a Bloomberg poll said they see signs of improvement in the economy, while 66 percent said they think the country is on the wrong track. Meanwhile, 55 percent say their children will have a lower standard of living than they did. And in particularly bad news for the White House, 44 percent say they're worse off than when President Obama took office in January 2009; just 34 percent say they're doing better.

    Those results are in sync with other recent polls that have showed pervasive economic gloom. Unemployment is currently at 9.1 percent and forecasters are expecting another quarter of tepid GDP growth.
    But another result from the Bloomberg poll suggests a fair amount of of public confusion about how to turn things around. Fifty-five percent of respondents said cuts in government spending and taxes would be more effective at creating jobs than maintaining or increasing government spending.

    The question is confusingly formulated, because economists usually think of tax cuts and spending increases as part of the same stimulus-based approach, not as opposing approaches. But at root, the results appear to indicate that most Americans think cutting spending, not increasing it, is more likely to create jobs.

    But that's almost the opposite of what most experts--on both sides of the political divide--believe. "That wouldn't square with the way we normally think about economic activity in a depressed economy," Andrew Samwick, a former chief economist on President Bush's Council of Economic Advisers, told The Lookout. When the economy suffers from a lack of demand, as it does now, Samwick explained, most economists think increasing spending is the more effective way to generate that demand and get things moving again.

    Why has the opposite view begun to take hold? In part, Samwick argued, it's thanks to the efforts of congressional Republicans, who want budget cuts and lately have hammered home the view that government spending has stymied growth. "You have the Speaker of the House talking about job-killing government spending," said Samwick, now a professor of economics at Dartmouth College. "But they have not been tasked with making clear exactly how the government is killing jobs."

    Republicans have suggested that government spending creates an expectation that taxes will have to go up, and the resulting uncertainty crimps hiring. But Samwick said that if that were true, the same trend would have led businesses to hold off on making investments in machinery--something that's not happening...

    http://news.yahoo.com/s/yblog_thelookout/20110622/us_yblog_thelookout/view-that-spending-kills-jobs-gains-traction-despite-expert-consensus
     
  2. Chaz

    Chaz observationist

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    You mean like all that spending the last few years pulled us out of this depression?

    Oh, wait........it didn't


    BOTH sides agree? Both sides of what exactly?
    Would that be both sides of the political divide that delivered the situation we are in now?
    What is meant is Keynesian economists from both parties agree.
    Surprise, surprise. These are the same people that told us in 2007 and early 2008 that everything was fine right before it wasn't.
     
  3. DWKB

    DWKB Registered

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    The article claims that people believe that government cutting spending would create more jobs and that that belief has no backing. Are you arguing that cutting government spending would create more jobs?
     
  4. Djaughe

    Djaughe ___________________ Contributor

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    Regarding thread title...

    [​IMG]
     
  5. Chaz

    Chaz observationist

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    Not by itself, no. Given the debt and deficit situation the need for a reduction in spending is justified regardless. Trying to tie it directly to jobs is part of the political hand fighting as these two parties work to stay in power.

    Unless it is the government hiring directly they don't create jobs anyway. To argue that more spending by itself would create long term job growth is just more demagoguery in the same vein as claiming that simply cutting spending will make jobs appear.

    Simply pumping more money into the economy to generate a demand stimulus at the direction of politicians is like trying to fill a leaky balloon. Once that spending has ended the balloon will flatten once again.

    Jobs in this country are mostly created by small business. The government can help create sustainable job growth by lowering the cost and barriers of starting and running these businesses. That would mean less federal taxes, regulations, and mandates. Businesses that are wondering what is coming next from Washington D.C. are less likely to hire, expand, or even start up in the first place.

    What we have are politicians on both sides owned by big business and they appear to be doing fine mostly at the expense of everyone else (e.g. stimulus spending to the politically connected and competition killing regulatory capture).
     
  6. 82CardsGrad

    82CardsGrad 7 x 70

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    This stuff cracks me up... In the midst of a brutal recession and post-recession economy, corporations are sitting on record amounts of cash. The American public has been in de-leveraging mode for the past 3-plus years. Savings rates are at the highest levels in decades.
    Yet, because of this, the White House says THEY need to spend more?
    As if the record spending, stimulus, QE 1 and QE 2 weren't enough? We don't know what economic metrics such as unemployment and GDP would have looked like without all that spending, however, with it, unemployment has been inching up again and is higer now than it was in February! The Fed just today lowered their GDP expectations for the rest of the year. I dunno... maybe it's just me, but I can totally understand why people might feel like radical spending hasn't worked...
     
  7. BigRedRage

    BigRedRage Reckless Contributor

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    cutting spending wont create jobs but it will help us stop borrowing from china.

    Raising spending wont create jobs either except more govt funded jobs you and I pay for.

    The right doesnt want to cut spending to create jobs, they want to cut spending because it is out of friggin control.

    But the democratic mis-information machine sure seems to be alive and well wink wink
     
  8. devilalum

    devilalum Heavily Redacted

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    Obama's got a $300 gazillion dollar war chest to kill this stuff come election time.
     
  9. LVG

    LVG Your Friendly Neighborhood P&R Mod Contributor

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    Say it loud, say it proud, we're all Keynesians now!

    Your article goes back to something I've been watching, which is the public's fundamental failure to understand what our basic situation is.

    Cut taxes, increase government spending, it's all the same thing really. You're trying to boost aggregate demand. Do that (so the theory goes), and you heat the economy back up.

    So, I find it funny when one side argues one thing, and the other side another, because in reality they're arguing about which lug to take off the flat tire first. In the grand scheme of things, it's really not that important.

    That's why I try to understand the underlying basics of the issue - the theories behind them and the facts that surround the issue itself, because those facts are rarely stated in the media, and I think most people are unaware of them in general.

    One idea that's been bouncing around in my head, however, is that the political policy of tax cuts and non-existent spending cuts is a long term calculation where if the GOP can get the deficit large enough, there will be no choice but to embrace draconian cuts across the board, thus realizing their stated goals of smaller government.

    -----

    Thought two. Government job killing spending.

    Technically, any distortion in a perfectly free market will cost gains to trade. That's where they get this idea of "government job killing spending", because of the distortions to the market that the government causes.

    That's not to say that these distortions are good or bad, but that's their argument.

    -----

    #3. As to why we're not out of this situation yet, I think that we're overlooking an important fact. The population in this country is getting older, and with that brings reduced spending and whatnot. This means that if the population segment (specifically the silver tsunami) retiring or reducing consumption is larger than the population segment that is increasing its consumption, there's not a whole lot anyone can do, period. No amount of helicopter money is going to help.
     
  10. LVG

    LVG Your Friendly Neighborhood P&R Mod Contributor

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    Yeah, because the government is trying to boost aggregate demand. C+I+G=Y.

    QE is a central monetary policy idea that if the overall monetary supply decreases (and lending / credit is included in that calculation), a central bank can fight that contraction by Quantitative Easing, or by increasing the quantity of money available to ease the cash crunch. The problem with QE is that the central bank has to essentially guess when to start reducing the QE Cash to make up for the increasing credit available. Too soon, and crunch comes back. Too late, and the currency is devalued.

    So why are corporations sitting on piles of cash? I have a couple of ideas:

    1. The fundamental lending model, based upon credit scores and whatnot, basically got trashed by this recession, and they're trying to figure out what to do about it.

    2. Some additional currency reserves will be required under Frank-Dodd.

    3. There's a lot more bad news coming out and the corporations generally have an idea that it's out there - does anyone remember Subprime A (I saw an article on that a few days ago...)?

    4. Corporations believe that the risk of lending is higher than any potential payoff.
     
  11. LVG

    LVG Your Friendly Neighborhood P&R Mod Contributor

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    What if I told you that since 1955, the number of federal government employees (excluding military) has remained relatively consistent?
     
    Last edited: Jun 22, 2011
  12. 82CardsGrad

    82CardsGrad 7 x 70

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    You definitely dig into this way more deeply than do I... All I know is that spending/stimulus/QE 1 & 2 didn't do what the "experts" thought it would.
    And, when I saud "corporations" were sitting on record levels of cash, I wasn't even thinking about banks/lenders... I'm talking about all over corporate America. The GE's, Intel's, Manufacturers, Service Providers... each quarter, the Fortune 500 is reporting record profits. In the majority of cases, it's not simply because they cut spending, but rather, it also includes revenue growth.
     
  13. jefftheshark

    jefftheshark Drive By Poster Contributor

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    People don't spend money when they fear for their jobs.

    Americans are not going to see an increase in employment until (A) they slash their wages to be competitive with developing markets, or (B) go to war (hot or cold) with the cheap labor nations to effectively stop multi-national corporations continuing on with a lucrative wage arbitrage system.

    (A) is politically and socially unfeasible. (B) isn't a whole lot better.

    The only reason the GDP numbers are positive is because of the "G" component. This is akin to paying yourself a huge wage based totally upon credit card use. Your neighbors might think you're rich, but the foundation of your life is built upon cotton candy. Add a little rain and the whole thing disappears in a flash.

    The same economists who are calling for more spending are the same one's who missed the entire financial crisis of 2008. That they have no idea what they are talking about should come as no surprise. That they come from both sides of the political aisle should come as no surprise either.

    There will be no political solution until the crap hits the fan. But that could be years of zombie-like existence until then. Meanwhile we'll be treated to article like this where experts point fingers at each other safe in the knowledge that they'll never be proven wrong because something "unexpected" will arise and then they can all blame that "black swan" for blowing up the mess they created.

    JTS
     
  14. LVG

    LVG Your Friendly Neighborhood P&R Mod Contributor

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    I absolutely agree with you that it didn't do what it was supposed to do. And I'm not advocating another bailout (though, we may not have a choice) or stimulus program. But I'm curious as to why it didn't work.

    Why do you think corporate America is sitting on huge piles of cash (which, I'm sorry, brings this picture to mind)?

    [​IMG]
     
  15. 82CardsGrad

    82CardsGrad 7 x 70

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    :thumbup:
     

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