American Recovery and Reinvestment Act of 2009: What Would You Do to the Bill?
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Point taken, but the particular type of stupidity I'm decrying is illustrated by the anchors who describe the state of things like, "Nobel Laureate Joseph Stiglitz says the stimulus bill is needed, but some are calling it socialism." Nowhere is it ever pointed out that Joseph Stiglitz is right and the people calling it socialism are absolute morons who don't even know what "socialism" is. Stupid false equivalence.
As others here say: you can have a fair media or a balanced media, but not both. Right now our media attempts to strike a balance between sane people and morons, and all it does is misinform the American people. People think that there's a valid debate as to whether 2+2=4 or 2+2=5, when really the people pushing the latter are crazy.
And now watch it turn around 180 degrees tomorrow as the media address the Geithner bank bailout, which since he and Summers are Wall Street guys will end up being a gift of hundreds of billions of dollars to investment bankers and the banks' shareholders, instead of nationalization. Because, you know, "some call nationalization 'socialism.'"
Cleo
Merkinball
Deity
A really dissappointing string of posts from you Cleo
What? You've gotta be kidding me right? Why is a dollar spent by the government, a dollar that is spent on stimulus? How is spending a trillion dollars a year on handouts to people who do nothing "stimulating?" The government can pay people money to dig a ditch one day, and fill it the next, but that's not stimulating. It's really easy to point objects such as highway overpasses, bridges, hospitals, and schools, but it's much more difficult to see the stuff that didn't get built because government was spending it on overpasses, bridges, hospitals, and schools that it didn't need in the first place. If such spending is not done so in an efficient manner, if it is not prudent in nature, then it's not stimulating and will ultimately lead to a net LOSS to the economy. It is not the nominal amount of dollars spent that matters in regards to economy stimulus, it is HOW they are spent and if you get a return on your investment.
If what you are saying is true, then why not just let the government stimulate everything? They should confiscate all wealth, redistribute it, take out more loans, and print more money. We'd have so much stimulating activity going on that our recession worries would be over. But obviously this is fallacious.
HOW IS FOOD STAMPS STIMULATING!!!! RAWWWWWRRRR!!!
Taking money from one person and giving it to another person that isn't being productive is NOT STIMULATING! IT IS NOT STIMULATING IN ANY WAY SHAPE OR FORM!
Interesting isn't it? But I suppose this was the end goal for the socialists from the get go wasn't it? People like you and Cheezy scoff at the idea of liberals trying to create a nation that is dependent on the government. But then you have comments like this, and it's like, "Yeah Merk, actually, the people do expect the government to hold their hands and utilize populist dogma in order to create a placebo effect in their minds."
What? You've gotta be kidding me right? Why is a dollar spent by the government, a dollar that is spent on stimulus? How is spending a trillion dollars a year on handouts to people who do nothing "stimulating?" The government can pay people money to dig a ditch one day, and fill it the next, but that's not stimulating. It's really easy to point objects such as highway overpasses, bridges, hospitals, and schools, but it's much more difficult to see the stuff that didn't get built because government was spending it on overpasses, bridges, hospitals, and schools that it didn't need in the first place. If such spending is not done so in an efficient manner, if it is not prudent in nature, then it's not stimulating and will ultimately lead to a net LOSS to the economy. It is not the nominal amount of dollars spent that matters in regards to economy stimulus, it is HOW they are spent and if you get a return on your investment.
If what you are saying is true, then why not just let the government stimulate everything? They should confiscate all wealth, redistribute it, take out more loans, and print more money. We'd have so much stimulating activity going on that our recession worries would be over. But obviously this is fallacious.
HOW IS FOOD STAMPS STIMULATING!!!! RAWWWWWRRRR!!!
Taking money from one person and giving it to another person that isn't being productive is NOT STIMULATING! IT IS NOT STIMULATING IN ANY WAY SHAPE OR FORM!
Interesting isn't it? But I suppose this was the end goal for the socialists from the get go wasn't it? People like you and Cheezy scoff at the idea of liberals trying to create a nation that is dependent on the government. But then you have comments like this, and it's like, "Yeah Merk, actually, the people do expect the government to hold their hands and utilize populist dogma in order to create a placebo effect in their minds."
Thanks, Merky! I'll take the quote above as evidence that I'm doing something right.
Cleo
Merkinball
Deity
Thanks, Merky! I'll take the quote above as evidence that I'm doing something right.
Cleo
You let me know when you actually have an argument. Maybe then you can rebuild some of the tacit respect I had for you.
Bigfoot3814
Deity
Oh now that was just cold.
Merkinball
Deity
No it wasn't. I just want to know where Cleo is coming from. I usually appreciate Cleo's point of view and his/her arguments. I don't appreciate the points brought forth here. It's actually quite dissapointing, but not quite as dissapointing as Brennan blathering on about the poor Palestinians or Cheezy and his new found socialist love-fest. I just wanna know why Cleo believes those things, and if Cleo has any substantive counter-points. But for some reason, Cleo is running away from the argument.
What's cold about what I said? I'm just trying to mine information.
Merkinball,
Thanks for the kind words, but whether you respect me isn't really a concern of mine. We've had discussions before, and after one of them a few months ago I just decided not to respond to you on substantive issues anymore. It's cool, though.
Cleo
Thanks for the kind words, but whether you respect me isn't really a concern of mine. We've had discussions before, and after one of them a few months ago I just decided not to respond to you on substantive issues anymore. It's cool, though.
Cleo
Bigfoot3814
Deity
I dunno, to say Cleo had lost your respect seemed cold to me. But whatever, I'm no sociologist. Then again, Cleo's latest post was pretty much a cop out.
Integral
Can't you hear it?
Cleo -
While it is fine to label all government spending "stimulus", doing so obscures the issue. In this context, by stimulus spending we clearly refer to spending that will provide a large boost to aggregate demand and will target unemployed resources; in Keynesian terms, spending that has a high multiplier effect.
It may be true that some kind of stimulus package is needed. But the revised bill in front of Congress right now is not that package. By slicing out aid to the states, funding for school construction, and a host of other timely items, it is unclear whether the final bill will have any net stimulus impact. What we are left with is a hodgepodge of solid ideas (the aid to the states, now sadly reduced), good ideas (infrastructure spending) and plain bad ideas (the temporary payroll tax cut and most of the energy provisions). The bad outweighs the good.
The proposal in front of Congress has no right being labelled "stimulus". Even Krugman, who has been pushing for this since the beginning, is starting to have doubts about the final product.
--
edit: regarding food stamps, I'd put those in the category of "basic human decency" rather than "stimulus". However, they do have all the right signs: they are timely in that they can be sent out almost immediately (one T-word: check). The are designed to be targeted to those who need them most (two T-words: check). The increase in aid can be scaled down after the recession is over; that is, the boost can be made temporary if need be (three T-words: check). Nearly all of the money going to food stamps will be saved rather than spent (multiplier: check).
While it is fine to label all government spending "stimulus", doing so obscures the issue. In this context, by stimulus spending we clearly refer to spending that will provide a large boost to aggregate demand and will target unemployed resources; in Keynesian terms, spending that has a high multiplier effect.
It may be true that some kind of stimulus package is needed. But the revised bill in front of Congress right now is not that package. By slicing out aid to the states, funding for school construction, and a host of other timely items, it is unclear whether the final bill will have any net stimulus impact. What we are left with is a hodgepodge of solid ideas (the aid to the states, now sadly reduced), good ideas (infrastructure spending) and plain bad ideas (the temporary payroll tax cut and most of the energy provisions). The bad outweighs the good.
The proposal in front of Congress has no right being labelled "stimulus". Even Krugman, who has been pushing for this since the beginning, is starting to have doubts about the final product.
--
edit: regarding food stamps, I'd put those in the category of "basic human decency" rather than "stimulus". However, they do have all the right signs: they are timely in that they can be sent out almost immediately (one T-word: check). The are designed to be targeted to those who need them most (two T-words: check). The increase in aid can be scaled down after the recession is over; that is, the boost can be made temporary if need be (three T-words: check). Nearly all of the money going to food stamps will be saved rather than spent (multiplier: check).
sonorakitch
Overseas hunter
Cleo,
You really should justify how you think a food stamp is a stimulus. I'm curious.
You really should justify how you think a food stamp is a stimulus. I'm curious.
And this is why stimulus is a poor word choice if it blankets all government outward money transfers.Integral,
But attempting to create a fictional divide between "stimulus" and "spending" is dishonest. It creates the idea that there could be a stimulus package without spending, like McCain's "all tax cuts" plan. Which, I think, is the whole point. If you want to say that "stimulus" is only stuff with a good multiplier (>1?), then yeah, not all spending is stimulus (I guess paying people to bomb bridges wouldn't count, nor would nearly any tax cuts). But I was thinking differently.
Believe me, I don't think the bill is perfect. I'm not defending the bill.
What do you think of the Moody's chart that's been everywhere lately? This one:
Sonorakitch,
If you give poor people food stamps, they immediately spend them in stores in America, staffed by American workers, and on food transported by American truck drivers, probably from American farms. This is like Econ 101, right? Moody's (see chart, supra) suggests a 1.73 multiplier for increases in food stamps.
Cleo
But attempting to create a fictional divide between "stimulus" and "spending" is dishonest. It creates the idea that there could be a stimulus package without spending, like McCain's "all tax cuts" plan. Which, I think, is the whole point. If you want to say that "stimulus" is only stuff with a good multiplier (>1?), then yeah, not all spending is stimulus (I guess paying people to bomb bridges wouldn't count, nor would nearly any tax cuts). But I was thinking differently.
Believe me, I don't think the bill is perfect. I'm not defending the bill.
What do you think of the Moody's chart that's been everywhere lately? This one:
Sonorakitch,
If you give poor people food stamps, they immediately spend them in stores in America, staffed by American workers, and on food transported by American truck drivers, probably from American farms. This is like Econ 101, right? Moody's (see chart, supra) suggests a 1.73 multiplier for increases in food stamps.
Cleo
Merkinball
Deity
Oh, well then clearly we should all stop working and just get food stamps. Because obviously that will end up working out in everybodies favor right?
But oh wait, it doesn't work like that. Because the money you took from person A who is productive, to person B who isn't doing anything, can be spent equally as well (or even on durable goods) in American stores, employed by American people, transported by American truck drivers, and made in American factories.
The difference is that person A is being productive, and person B is not. There is no net economic benefit to taking money from one person who is productive, and simply giving it to another. It will either be spent in the same way, or even worse, it will detract from further investment in the economy.
To go farther, this package is being paid for on credit. And when you pay for a bill like this on credit, it is really no different than flooding the currency if you're distributing the money to people who aren't being productive. This isn't a magical circle of infinite wealth. If the magic pill to infinite economic growth simply rested on taking out loans and dishing it out to people so they'd buy stuff, don't you think it would have been done somewhere?
At some point we have to pay these loans back. And with interest. This is where the real downward effect on the long term viability of our economy will be felt. And I hate to say it, but our spending habits are resulting in a downward spiral of taking on more and more debt just to keep our heads above water. There's gotta be an end game somewhere.
Econ 101 indeed.
Ziggy Stardust
Absolutely Sane
0.29 means that for every dollar spent, you'll get 1 dollar 29 in return I hope? Not just the 0.29 and take a loss of 0.71 right?What do you think of the Moody's chart that's been everywhere lately? This one:
I googled for Moody's chart for some explanation, but I ran from the math involved
I think that we should differentiate between spending as a GDP stimulus, and spending as a productivity stimulus. I think that this is where the differences between food stamps, digging and filling holes, and building infrastructure really shines. Food stamps, for example, have a quick return on GDP (greater than leaving the rich people with their money, actually) but only gives a marginal productivity benefit (which I can't differentiate from leaving the rich people their money). Giving food stamps to kids, otoh, has a really good productivity benefit since proper nutrition is essential for good mental development.
I think people here are comparing apples to oranges.
I think people here are comparing apples to oranges.
Merkinball
Deity
yes it is.........
Any day you want to make a substantive contribution and actually talk about how something that is completely illogical is possible, that would be fine by me.
If you take my money and give it to Bob over there who's doing nothing so he can go buy stuff, there is NO NET BENEFIT TO THE ECONOMY. None. Because I would have spent the same money, just on different things.
Integral
Can't you hear it?
@Cleo
I hadn't seen that particular chart. The estimates look decent, though the tax cut multipliers are probably a bit low. I prefer the CBO's version (table 2 on page 9), which gives expected ranges for certain multipliers rather than point estimates.
@Merk:
Think of this little scenario. The economy needs a boost in spending right now to stimulate aggregate demand. You, presumably, are saving some of your paycheck. Normally those savings would be used for investment purposes, but since banks aren't lending, those savings are idle. So the government takes your savings, gives it to someone else in the form of food stamps, and voila! Idle savings have been transfered into spending. That's (an incredibly simplified version of) the "food stamps as stimulus" argument. Indeed, it's the jist of the entire "stimulus" argument: that there are idle resources (money, labor, whatever) that could be usefully producing stuff. The stimulus bill will try to make those idle resources become productive again.
And since we have lost ~3.6 million jobs over the past few months, it's safe to say that there are idle resources about. The real trick is to figure out whether the stimulus bill is actually targeting those unemployed resources.
I still much prefer the "extending access to food stamps during the recession as basic human decency" argument, but whatever.
edit
@Ziggy:
For the multipliers, 1.0 means that for every $1 of spending in that area, GDP will be boosted by $1. A multiplier of 0.29 means that the government will spend (or, in the case of taxes, reduce its revenue) by $1 and this will boost GDP by only 29 cents.
I hadn't seen that particular chart. The estimates look decent, though the tax cut multipliers are probably a bit low. I prefer the CBO's version (table 2 on page 9), which gives expected ranges for certain multipliers rather than point estimates.
@Merk:
Think of this little scenario. The economy needs a boost in spending right now to stimulate aggregate demand. You, presumably, are saving some of your paycheck. Normally those savings would be used for investment purposes, but since banks aren't lending, those savings are idle. So the government takes your savings, gives it to someone else in the form of food stamps, and voila! Idle savings have been transfered into spending. That's (an incredibly simplified version of) the "food stamps as stimulus" argument. Indeed, it's the jist of the entire "stimulus" argument: that there are idle resources (money, labor, whatever) that could be usefully producing stuff. The stimulus bill will try to make those idle resources become productive again.
And since we have lost ~3.6 million jobs over the past few months, it's safe to say that there are idle resources about. The real trick is to figure out whether the stimulus bill is actually targeting those unemployed resources.
I still much prefer the "extending access to food stamps during the recession as basic human decency" argument, but whatever.
edit
@Ziggy:
For the multipliers, 1.0 means that for every $1 of spending in that area, GDP will be boosted by $1. A multiplier of 0.29 means that the government will spend (or, in the case of taxes, reduce its revenue) by $1 and this will boost GDP by only 29 cents.
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