Fiscal Stimulus -- time to call it a failure?

[malasadas.livejournal.com]

Through 2009 and 2010 up until now, I've been on a "wait and see" horse regarding the administration's fiscal stimulus package. Certainly calling it a failure in the early months while the economy was still in deep recession and cratering jobs at a rate of 500,000 a month was ridiculously partisan. In fairness, administration partisans who immediately took the reversal of job losses from a flood to a trickle and used that as evidence of the stimulus working instead of the regular cycle of recovery setting in were equally partisan. For a while, those advocates could point at a slow recovery emerging even if job creation has not materialized.

Patience is not a common virtue in the face of a deep recession. And today's media environment makes it substantially worse. Consider that in the last truly deep recession during Reagan's early term (a recession of conditions Reagan inherited) unemployment rose to 10.8% in December 1982 and averaged 9.6% throughout 1983, only falling to 7.2% by the 1984 election. While Reagan suffered for it in the polls during his early term, there simply were not the media outlets to scream "failure" 24/7 while the economy recovered from multiple crises.

On the other hand, we are 18 months into the Obama administration, and the fragile recovery shows signs of cratering -- employment numbers are not good, home foreclosures are rising and home prices are dropping again, and there are good chances of a double dip, especially as state aid from the stimulus bill expires and tax receipts remain low due to extended high unemployment.



I still lean towards it is hard to say, but it is also important to consider the scope of federal action in response to the fiscal crisis and subsequent recession. TARP is 750 billion. The stimulus bill is another 780 billion. The federal reserve has pumped nearly a trillion dollars into the economy and has used its authority to buy nearly 1 trillion plus of the so-called "troubled assets" from banks. After two years of vigorous government effort, what we have is an anemic recovery adding nowhere near enough jobs to even account for new people entering the work force let alone to make up for the jobs lost to people who were working when this started.

So midway through 2010, what is the best current assessment of government stimulus? A few potential theories:

1) The stimulus has worked and we'd be much worse off if it hadn't been passed. This is a popular line among administration supporters who point to an alleged 2 million jobs "created or saved" by stimulus spending on the assumption the recession would be longer and deeper without it. Unfortunately, as many "saved" jobs are public sector jobs in states that got temporary help to cover their budgets, those sme jobs may well be lost now that the stimulus money is winding down. Further, and more importantly, this is arguing an alternate history -- we'll never know if job losses began to decrease because of fiscal stimulus spending or the cycle of this recession. In essence, it is arguing about the existence of fairies.

2) The stimulus has helped somewhat to stave off a Depression, but was never large enough to be truly jump start an economy this big. I've read this from Krugman since the recession started -- we need government action and it needs to be big and gall dang it, what we just passed isn't big enough. He may have a point -- despite sniggering by the right, Krugman has probably forgotten more about economics than most people will ever know, and he can point to actual analysis rather than axiom. The problem here is it is asking for more than political will could have possibly delivered. Further, the process of creating the actual bill was some bonafide Washington sausage making that directed a lot of funding away from jobs directly. There's little reason to believe that an even larger package would have not been subjected to even worse sausage making.

3) The stimulus has helped but was never properly designed as a jobs bill. A lot of the stimulus was designed to encourage behavior via tax incentives. And more was aimed to help states make their budgets and avoid painful cuts. But there had to be an assumption that the recovery would be in full effect and state tax receipts would be going up -- that hasn't happened and now jobs in schools, for example, that were saved via federal money going to the states may be on the chopping block in the next 6 months. If the central assumption of the bill was that we needed a bridge to get to the point where the economy was adding enough jobs to increase tax revenues, then the bill is now clearly faulty and has mainly staved off cuts.

4) The stimulus bill was not worth the expense as the government cannot efficiently create jobs. There's something to this especially in cases where it can be shown that far more has been spent to save or create a job than the job can contribute to the economy. Of course, this critique often comes coupled with a fairly dogmatic belief that all the government can do is cut taxes and let the "market work". This argument tends to ignore the huge role that the Fed plays in handling the economy -- in fact, I'd argue that Paul Volcker's efforts to kill inflation and Bernake's current efforts to free the fiscal system from "toxic assets" have played enormous roles in their respective economies. Tax cuts and tax increases have, historically, both preceeded periods of high growth.

5) The stimulus bill actually made things worse and we'd have had a stronger recovery without it. It is true that overall unemployment with the stimulus bill has peaked higher than projections for unemployment without the bill -- all made before the full recession had played out. Moreover, this argument relies on the belief that government spending has a "crowding" effect that pushes out private economic activity -- which might account for unemployment peaking as high as it has. Of course, there is a problem with that -- there has been no tax increase yet and despite heavy borrowing, there has been no increase in interest rates that would normally be presumed to accompany that. So the traditional explanations for "crowding out" don't apply at this time. More broadly, if this idea applied to government spending under all circumstances, we'd have to believe that the economic growth of the Reagan years would have been even greater -- if the administration hadn't spent so much money increasing procurement from defense contractors. In other words, it is a bit of a mirror image of number 1, arguing about an alternative history when it is too early for the data to model it.

So the question from the subject line remains -- it is time to call the stimulus bill a failure and if so for what reason(s)?

Comments

[mrbogey.livejournal.com]

This may be the best post you ever made.

Four is the closest to the truth.

Tax cuts and tax increases are just tools that can help or hurt an economy based upon how they're managed. Sometimes tax increases can be a boon and sometimes they do more damage than they're worth. The biggest problem with tax increases is they often focus on a narrow group that capriciously grows and shrinks with the market so a market collapse wipes out the tax base faster than the gov't can cope with declining revenues.

But not all jobs and spending produce equal value and the folly of central planning involves the belief that they can fully manage it. And they can't. Their track record is hit and miss but more miss.

And what's not helping is we have a large gaggle of pseudo-capitalists who are just as full of folly but due to being artificially propped up all these years by drunken marketeers think they're brilliant.

But either way markets aren't always supposed to magically grow but the gov't thinks they must.

[harsens-rob.livejournal.com]

Disagree, but respectfully - I'm not an Obamabot.

I'd go with a combo 2/3.

I think the stimulus kept us (especially the Bush-approved 'bailout', much as it galls me) from experiencing a new depression, since the only ones who didn't seem swept up in it was China - and they're not exactly our 'friends'.

But, I also think it was ill-prepared in a rush to be seen to DO SOMETHING! because our vast electorate is - in a word - stupid. We've all become a little too comfortable with "I want it and I want it now, and if I don't get it, there'll be hell to pay for somebody", including me - occasionally.

It's difficult to have patience when you think your job may go away and leave you over a barrel, with your pants pulled down, left broken - sticky - and confused.

It also doesn't help that anything the other party does is AUTO_FAIL on the blogs, which inevitably make it into mainstream media so they can assure us they're still relevant. Everything has become a "control the news cycle" over "I won't lie, this will hurt, but here's why I have to make you suffer for the nation's good" partisanship, which is just driving us to the lower and lower "common denominator".

I don't think *many vocal, but probably in the minority* citizens actually understand what a depression actually looks like, and everyone thinks "the dust bowl" can't happen nowadays.

[geezer-also.livejournal.com]

This would be a great place to start with a humorous remark, but it's not funny any more.
Full disclosure: I only got a C in econ 101 so my thoughts may not be worth much, but that rarely stops me from offering my opinion anyway.

The problem is I have no real opinion since I have no real answer. Common sense is rather "pooh poohed" around here, and I know a government can't be run like a household, but I also know that you can't continue to pour good money after bad. What i mean by that is that it seems every time Dems (or evens Reps,just not as often) come up with a new idea or program, if it doesn't work, it's because there wasn't enough money; like, if we only had another $15 billion we could raise the graduation rate from 52% to oh, maybe 58%. Granted the government can print all the money they want; but even my limited understanding knows there is a reckoning somewhere down the line.

I'm looking forward to the discussion on this, hoping to learn something, like maybe someone will explain how legalizing 12 million poor people is going to help the economy.

[eracerhead.livejournal.com]

"explain how legalizing 12 million poor people is going to help the economy."

I assume you mean undocumented workers as it is not illegal to be poor, and you assume that undocumented workers are poor rather than middle class.

Anyway, here is my take on it:

The fact that a given activity is illegal means essentially that the funding is "off-book." Let's take the example of prohibition. States received tax income from the sale of alcohol. Once prohibition hit it was driven underground (off-book) so the states lost the revenue. In addition to the loss of revenue there was the additional expense of enforcing prohibition. Lifting prohibition reduced the need for enforcement and allowed a tax stream to offset any detriment to the economy caused by alcohol consumption. The situation with undocumented workers (and narcotics for that matter) is similar. They are essentially off-book costing us much more than if they were allowed to contribute to the economy.

Prohibiting activity always costs money - it isn't free. Regulating activity can be revenue-neutral as the cost of regulation can be offset by taxation. This does not mean however that everything will be implemented properly. It is just that prohibition is always a loss whereas regulation may or may not be a loss.

Prohibiting something means that one has to have firm ethical or moral reasons to justify the costs. This is largely why illegal immigration is such a controversial subject whereas theft, murder and rape are not.

[policraticus.livejournal.com]

1.) Unfalsifiable. "Created or saved." Bah. What could be more mendacious? Any other administration making this kind of pie in the sky claim would have been laughed out of Washington.

2.) Untestable. Plus, how much would be enough? That number is just as susceptible to also falling just short of the goal. It ends up never being enough, which come to think of it would probably suit Krugman just fine.

3.) Moderately persuasive, but assuming that it could have ever been "properly targeted," seems like an grandiose exercise in wish fulfillment, given what we know about people and government.

4.) Elementary and has the added value of being simple. Economic growth does not proceed from the government, the government can only set the parameters for a stable economy and then get out of the way as much as possible.

5.) I think if this is tied to #4 it has some merit on the margins, but I don't think even Obama levels of spending have reached true "crowding out" level. It think it could, certainly if he listens to Mr. Krugman. Related to this, however, are the real levels of uncertainty and anxiety that Obama and his administration have created in the financial community, and the country at large. Increasing the debt at an exponential rate, introducing sweeping, pervasive, confusing and contentious reforms, and talking cavalierly about taxation and regulation like they were panaceas, well... that is a recipe for scaring money out of the markets. Which, in case you were wondering, seems counter intuitive if you want to stimulate the economy. Right now a lot of US firms are sitting on huge piles of capital, but they are unwilling to expose themselves to unknown risks.

it is time to call the stimulus bill a failure and if so for what reasons?

I think if we take the administrations own projections and layer them over the actual data this question answers itself. For whatever reasons, and I am sure they make up a beautiful tapestry of fail, we ain't stimulated jack.

[blueduck37.livejournal.com]

In my opinion, Obama should've gone BIG with his stimulus (ie. green jobs NEW DEAL big) right after inauguration instead of blowing it on tax cuts, construction, & state aid. They spent the $$ on short-term stuff-- because they wanted that immediate boost-- and in doing so, may have lost the bigger picture battle.

Think of something like Cash for Clunkers. Okay great, you boosted car sales for one quarter. Now they suck again. How does help America move forward in the 21st century. Etc etc.

Democrats always aim low and compromise from the outset-- see also: healthcare reform, financial reform, etc-- and get half-results and then got ripped apart by the people who made the mess they were attempting to fix. Lots of action, little vision.

That's where I am in terms of frustration now.

[jerseycajun.livejournal.com]

*acknowledgment*: I'm copying the bulk of this response from another thread in which I came in late so nobody probably saw it anyway, and it applies here too... */acknoledgment*

I feel like a broken record saying this, but it always comes as the first thought into my mind when I hear something of this nature...

There is no way to know where, in advance no less, the things upon which massive infusions of spending will be more efficiently used or where the innovations which will prove to be more successful will come from. Even successful actors in the market can't honestly say in advance they knew for certain that their decisions over spending would have a good result, they just made what they believed were the best decisions towards achieving a goal, as did everyone else. It isn't until there is hindsight that these things become evident, and people gravitate towards the would-be successful idea. The only reason markets are generally successful (notice I didn't say "always") is that there is strength in the number of decisions being made at any given time; a quality that cannot be supplanted by a government which acts as the single spender of consequence.

If a government decision on spending actually has a successful outcome (a rarity, if one discounts the numerous creative accounting slight-of-hand tricks used), it cannot be attributed to any notion of advance wisdom or on democracy, or other check, balance or mechanism, as much as luck. Much in the same way as the successful market actor is lucky when his investment turns up good. Sure, both may be making rational and smart decisions, but even smartly run businesses fail. There are far more non-descript enterprises in the market which fail that we never hear of or talk about, than there are successes, which everyone hears about. Applying the same ratio of success-to-failure on government decisions illustrates clearly the elephant in the living room when it comes to the argument over trying to get 'government spending more wisely', when that involves anything more than trying to find more places where government probably shouldn't be spending at all.

*/copypaste*

This argument applies for 'green jobs' as well. There is no difference between the reason why *cash for clunkers* failed and why doing what you're suggesting would likely fail as well. Spending does not create need, and it's in being able to reorient and find out where the need is (done by those same large number of market actors, by trial and error) which drives lasting job creation. Job creation is the response to finding a need and attaching resources to fill it.

[meus-ovatio.livejournal.com]

I'd call it a non-factor in the overall scheme of things. Our economy produces little value, and the binge-drinking on real estate values looks like the last hurrah of an obsolete economic system which has way too much money in paper and finances.

I mean, what is there to stimulate anyway?

[badlydrawnjeff.livejournal.com]

So the question from the subject line remains -- it is time to call the stimulus bill a failure and if so for what reason(s)?

It was time to call it a failure a year ago, and mostly because of a mix of 4 and 5. The government has never shown a proclivity in creating meaningful jobs, so this result should not have come as a surprise. You'll note that I've been saying this for over a year now, and no one wanted to listen.

The issue is the same as it was back when this first came about - the government is doing nothing to incentivize the private sector to increase employment, period. The Obama administration has done nothing to decrease their costs while creating a more more adverse regulatory climate than I even could have predicted, and, with the looming tax increases, companies, investors, and business people are of course hesitant to do something that will bite them in 6 months. It's a perfect storm of economic peril, and we walked right into it because our President didn't read his history books.

At the very least, making the Bush tax cuts - all of them - permanent will at least stabilize the long-term costs and increase business and investor confidence. Removing the health care mandate will reduce the pending insurance cost increases on the business and consumer end and provide more stability there as well. Beyond that, well, we've dug a bigger hole, and I fear that we're going to do more Hoover/FDR-style meddling to get us out when it's the last thing we need.

[badlydrawnjeff.livejournal.com]

I also realize I need to take a refresher course in the semicolon, but whatever.

COMBOOOOOOO!

[oportet.livejournal.com]

THE STIMULUS HAS worked and we'd be much worse off if it hadn't been passed.
The stimulus has HELPED SOMEWHAT TO STAVE OFF A DEPRESSION, but was never large enough to be truly jump start an economy this big.
The stimulus has helped BUT WAS NEVER properly designed as a jobs bill.
The stimulus bill was not WORTH THE EXPENSE as the government cannot efficiently create jobs.
The stimulus bill actually made things worse AND WE'D HAVE A STRONGER RECOVERY WITHOUT IT.

Re: COMBOOOOOOO!

[jerseycajun.livejournal.com]

Wow.

I'm jealous.

[pastorlenny.livejournal.com]

Good post.

good post

[whoasksfinds.livejournal.com]

poorly designed. over promised. futile.

our problem is that recessions are politically toxic. anytime there is an economic downturn, the government immediately jumps into action to prevent any economic suffering. but in reality, recessions are part of the natural business cycle, and i would argue they are actually necessary for longer term economic growth. what we are dealing with now, is the accumulation of about 3 recessions that were never allowed to run their course because politics has made economic slowdowns impossible to bear for the party in power. its a little bit like the over protective parent who steps in every time their child is about to get in trouble. eventually, the kid finds itself in deep shit because lessons were never learned.

time for america to grow up. stop expecting the government to save your ass.

Re: good post

[htpcl.livejournal.com]

I love it every time I hear something like:

"America, grow up!"
"Stand up, America!"

...and my favorite:

"The values that we [America] stand for."

[abomvubuso.livejournal.com]

2 praises or more -> [recommended].

[eracerhead.livejournal.com]

Nope. Just like the war in Afghanistan needs more troops, we need to put more money into the stimulus. Republicans in congress take most of the meat out of the stimulus or they won't vote for it, now the weakened stimulus doesn't work and it's a failure. That is called a self-fulfilling outcome.

So now we have had two stimulus packages one during Bush under Republican control and a second under Democrats weakened by Repbulican stonewalling that are both claimed to have been ineffective. It's time to let the Democrats have a shot at an effective stimulus package.

Many of the national parks we enjoy today were built during the depression from government created jobs. During the recession at the turn of the last century, government-industry partnerships were built specifically to create jobs for the mass of European Immigrants hitting our shores. So anyone who says the government cannot create jobs is simply wrong.

[malasadas.livejournal.com]

I'm going to come back to the internet on Monday and find you've spawned a 90+ comment thread, aren't I?

[mijopo.livejournal.com]

The stimulus most certainly isn't a failure and we need a lot more of it as the recent job numbers demonstrate. Consumer spending is 70% of the economy if they can't/won't spend we have to replace that to keep the economy out of free fall. Unfortunately, Republican policies have left us ill equipped to carry on the fight:

http://www.businessinsider.com/chart-of-the-day-bush-policies-deficits-2010-6


Thanks for a well-written balanced post.

[badlydrawnjeff.livejournal.com]

How do recent job numbers show we need more?

[dreadfulpenny81.livejournal.com]

On the other hand, we are 18 months into the Obama administration...

And it's STILL all W's fault!

Sorry, that was my impersonation of pretty much every Dem in Washington.

[ironhawke.livejournal.com]

OH give me a break.

1: There is VERY MUCH a reasonable line of reasoning that lays a SHITPILE of the blame on the feet of the Republican-led orgy of spending, deregulation and goose-step voting that allowed this entire fucking thing to happen. 18 months is simply NOT enough time to resolve, drastically improve, and recover from a recession that wiped TRILLIONS of dollars in American capital and damned near broke our backs. Obama was essentially handed this one, the left looked to him to save our asses, and the right were hoping he'd fail and deliberately took steps to ensure he did.

2: Your premise has some validity, that we need to take responsibility for the actions of the current President. Which, by the way, he has. He passed bills that were essential to maintaining a bottom-line level of economic security, kept (most likely) millions of people at work that otherwise would have lost their jobs, and kept the economy somewhat floating. Something needed to happen, all this blather about "letting the market sort it out" and "political expediency" is bullshit.

[rasilio.livejournal.com]

1) I'm going to ignore this because you'd have to be a mindless supporter of the President** or just completely brain dead to believe this

2) Ah Mr Krugman. While it may be true that he has forgotten more economics than all of us combined that doesn't mean his analysis is correct. Really it is becoming pretty obvious that he has a major blind spot to the ineffectiveness of Keynesian stimulus, something which there is not a single instance of ever working in history.

That said, while Krugman has 'analysis' backing him up so do opponents of the Stimulus and while the opinion of economists was fairly well split on the necessity of TARP most of them admitted they only supported it because the banking situation was so dire and they just didn't know what would happen when 4 or 5 of the largest financial institutions in the world went kaput within a month or so. As for the Stimulus bill, yeah outside of Krugman and a handful of other neo-keynseans no one among economists thought it was a good idea and even where some saw a need for some sort of stimulus they opposed that actual bill because it was obvious it could have no stimulative effect.

3) the first clause if this statement is probably incorrect. A better phrasing would have been 'Stimulus would have helped had it been properly designed as a jobs bill'

4) I think some variation of this is probably where most people fall today, especially those who know at least a little about economics. That said there is more the government can do to boost the economy beyond tax policy and spending. In fact the best thing the government can do is to provide a stable regulatory environment so that businessmen can have some confidence in near and mid term planning. Without that the uncertainty created makes it impossible for them to move on capital expenditures and hiring. This is the biggest failure of the current Democan leadership. They have created an environment that is toxic to job creation, not just with taxes but with their Health Care bill, their 'financial reform', 'Card Check' and their 'Cap and Trade' plans.

5) Now here is where I fall. I might have supported an even larger stimulus bill had it worked on building things of lasting value rather than a Democans smorgasbord of initiatives and payoffs (mostly to public employee unions) they never could get passed on their own. As far as crowding out. You do not need current tax increases or interest rate hikes to stifle private sector activity, merely the specter of them will do. Contrary to Keynesian belief people do not just live in the here and now, they look forward too and when they see the extremely strong likelihood that 2 years from now their costs will be higher they are not going to spend and small businesses are not going to hire. Further there is a 3rd crowding out effect that you missed. When the government issues an extra few trillion in bonds someone has to buy them, and the cash they use to buy them would have either been spent or invested in private sector activities had it not gone into the government bonds.

Ultimately yes, the stimulus was an abject failure. At best it can be said that it allowed the economy to tread water for 2 years without doing ANYTHING to improve the underlying economic problems we are facing (over 200 trillion in total public + private debt in the US alone) while wasting 3/4ths of a trillion in the process.








** - note for those with typical LJ reading abilities, this is not a claim that all supporters of the president are mindless, merely that some are and they are the only ones capable of believing this. If you do happen to believe this statement then yes I am defacto calling you mindless.

Krugman was right

[telemann.livejournal.com]

Janurary 2009 he wrote

I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”

Let’s hope I’ve got this wrong.

source. (http://krugman.blogs.nytimes.com/2009/01/06/stimulus-arithmetic-wonkish-but-important/)

And for what it's worth, Krugman just wasn't pulling some arbitary numbers out of thin air with his analysis for the stimulus being too small. Since so much of the stimulus was really geared as tax breaks and reductions, which is what the Republicans were aruging for, which was an attempt to get 80 votes in the Senate for the final bill (oh the lulz for *that* notion in hindsight!!), Krugman's point about tax breaks was vinidicated as well.

Re: Krugman was right

[meus-ovatio.livejournal.com]

But Krugman can't be right! I've read books.

[monteci.livejournal.com]

Once again, we're missing the bigger picture here. A significant portion of the GDP in the United States is tied to consumer spending (its ridiculous, but work with me here). When the stock market tanked, fear amongst the public caused a huge reduction in discretionary household spending, which caused companies to re-tool and lay off extraneous resources. This in turn causes more of a dip in the markets, and extends the murderous cycle.

Stimulus spending reassures the public and the market that there is reason for hope and optimism. The lender of last resort is willing to step in and cushion huge blows to the national economy. Where we've really run into a problem is with how interdependent the global economy is. The only reason we're even having this discussion about a double dip recession is due to the fact that Greece (and to a lesser extent Spain and Portugal) are fiscally retarded. It scared the markets in Europe, which scared the markets both here and in the Far East.

Government spending works as a stopgap measure when the economy is faltering. It isn't just a democrat thing: Regan himself was pretty freewheelin' with the Benjamin's during the early 80's. The bottom line is, that the recession is temporary and will not last. The American car industry will emerge from this crisis in far better shape than when it entered it. Now, Austerity on the other hand...that's a whole different ballgame.

[harsens-rob.livejournal.com]

This.


And, plus, I have trouble with anyone that talks about this issue because they tend to ignore that which is fact, but inconvenient: see TEAPARTIERS, who bitch about 'taxes' even though I'd bet most of them have received TAX CUTS and the fact that everyone complains about the ballooning budget, but we're not allowed to touch Social Security, we can't cut Military Spending, we have to pay to support Gulf Coast residents in their disaster, we have to rebuild New Orleans, we have to pay for Schools, we need more National Guard on the Mex-US border, we need to have more police to check for illegal/drug dealers, we need more airport/port security...

Need I go on. How exactly is this going to be paid for through "cuts"? Apparently, people seem to think there should be NO WELFARE WHATSOEVER AND NO UNEMPLOYMENT EITHER, except when you're suddenly impacted by things beyond your control, then it is completely different.

[reality-hammer.livejournal.com]

I just posted something very much like this. I'm not sure where you got your unemployment rate number for Reagan, but the truth is that the rate had fallen back to almost 8% by the end of 1983.

This is a chart for both recessions, starting in June, 1981 for Reagan and January, 2008 for Bush/Obama/Democrats in Congress ;)

We have a pretty clear division between tax cuts and regulatory easing for the Reagan era and deficit spending and regulatory increases for the recent time period.

[telemann.livejournal.com]

We have a pretty clear division between tax cuts and regulatory easing blah blah blah.

No we do not.

Winners and losers

[sophia-sadek.livejournal.com]

In my neck of the woods, there are both winners and losers. Some people are in a position to benefit from the stimulus package and others are totally without hope. The hopeless ones will probably wind up living under a bridge for the rest of their days. Those who benefit will probably squirrel away some of their cash in Beck's Goldline investments in anticipation of the days when the Republicans get back in office.

[nevermind6794.livejournal.com]

The stimulus did help, but not as much as it could have. Too much focus on tax cuts, too little on our crumbling infrastructure.

Another problem is misconceptions about the economy. First, the recession was worse than anyone thought, so Obama's unemployment projections were too low. If he'd projected 11% unemployment without stimulus, I don't think people would be as angry.

Second, people are expecting everything to turn around by tomorrow. Obama sold the stimulus as making that happen, but it was never realistic.

Third, our economy is not so bad in terms of GDP, which is a true measure of value; most people measure the success of an economy by unemployment, though, which isn't a good measure. If there was one guy controlling all the U.S. economy in his mom's basement and generating $30 trillion of value, that would technically be more valuable than our millions of people generating ~$14 trillion of value. So companies are still productive and all that, they've just learned that they don't need as many workers for that level of productivity.

[rasilio.livejournal.com]

No, there were quite a few of us who knew exactly how bad it was.

[emerald-scales.livejournal.com]

Just my POV, is it really the government's job to create jobs? The gov could give companies incentives to hire more people, but at the same time those people still need to be paid. If the companies do not have the money to pay them, well... Then you also have the people that are working two - three jobs to get by. As Bush put it: "How uniquely American."

Lets not forget that we have the baby-boomers. A lot of the current jobs are taken up because of that, but when they start retiring thre will be more of a call for Social Security than for employment.

I see it as this big lump that is now in the throat of America and we now have to choke it out. The people on high need to be allowed to do their thing and get stuff sorted out as best they can, and the only way they can do that is with time.


One thing that can be done to save money is to stop throwing millions into a "war effort" that a majority here do not really care about, or are even unsure about. If the warmongers want to spend money on war, let them use their own (most of them have enough anyway!)

[whoasksfinds.livejournal.com]

If the warmongers want to spend money on war, let them use their own

and if the hippies want their health care, let them use their own! right?

[shastzi.livejournal.com]

I vote for *None of the Above*
History shows that all the regulations and institutions that enforced them, that were installed right after the Great Depression, were dismantled during 1999-2000.
Giant banking institutions spent millions lobbying in order to achieve this.
So with the floodgates open, all kinds of previously illegal practices became the norm, like the creation of Credit Default Swaps and other insane, destructive trading practices.
It's a wonder things did not collapse earlier than 2007!
When everything went to hell. Huge finance corporations successfully were bailed out with taxpayers money.
How? Because these huge businesses already bought the U.S. govt.
The things Thomas Jefferson warned us about with "Big Banks" have come true.
That also explains why *nothing* has been done to reinstall all the regulations that were put in right after the Great Depression.
Why? "That might hurt the economic recovery"
The economy is already shot. It will not recover from this state for a *very long* time until the factors that caused it are removed and this hasn't been done yet.
Time to finish taking the pain and regroup.
That isn't going to happen until someone or some entity faces down the huge banking and finance industry.
Welcome to the Plutocratic United States of America.
Where everyone is equal but the rich are more equal than the rest.

Cheers!
;)