How much is Obama's job plan going to cost?

[Bonzi Lighthouse]

How much is Obama's job plan going to cost?

Maxine Waters wants $1,000,000,000,000, do I hear 2?

 

[mame]

I'm 99% sure he plans on proposing every bit of spending with offset deficit reduction, otherwise any spending proposals would just be political suicide; He'll likely pursue some peices of his "grand bargain" to pay for the stimulus.

And yes, it should be well over a trillion in spending; Sure, that seems like a big number, but the economics tells us it should be at least that if not considerably more.

 

[hazyintentions]

I'm 99% sure he plans on proposing every bit of spending with offset deficit reduction, otherwise any spending proposals would just be political suicide; He'll likely pursue some peices of his "grand bargain" to pay for the stimulus.

And yes, it should be well over a trillion in spending; Sure, that seems like a big number, but the economics tells us it should be at least that if not considerably more.

Keynesian economics will fail this country and your man's administration .

Here's a good analogy for you:

If you have been confused about the differences between the Keynesian and Austrian schools of economics, may I humbly propose an analogy that may help your understanding. If you don’t think this is accurate or helpful then please let me know. I’m new to this myself.
Fire policy -- In the early 1900s the US Forest Service implemented a new policy to aggressively suppress all forest fires. Citizens didn’t like to see trees burn and the lumber companies saw profits going up in smoke. Over the years they obtained equipment, trained men, and worked out elaborate plans. With a lot of time and money they reduced fire damage considerably.
Over the years the forest management experts began to notice problems. Without periodic small fires the undergrowth became thick. It ignited easier, acted as additional fuel making the fire hotter, and sent it up into the crowns of the mature trees. This spread the fire faster and farther, killing more of the forest.
With further study they found that in the pasts forest experienced periodic small fires which cleared the undergrowth and burned up the deadwood. They usually did not reach the crowns and burned themselves out without doing great damage. They triggered the tree seeds to sprout and start a healthy new generation. The mature trees also grew better. The old policy of trying to manage nature was counter productive. The policy was changed to allow the natural cycle to return.
Keynesian school – All recessions are bad and must be suppressed by government actions. This protects established businesses and jobs. The methods are elaborate and costly, but a benefit to the public overall.
Austrian school – When markets stray too far from reality they must be purged by adversity. This clears unneeded or failing enterprises so capital is not allocated wastefully, and new businesses can emerge. Periodic small recessions are the price of a healthy economy.
Recent situation -- Unfortunately, after decades of total suppression many forests were overgrown tinder boxes. At Yellowstone National park the “hands off” policy let a fire get completely out of control before they used aggressive suppression. 36% of the park burned and much of this area is still black 20 years later. At Los Alamos a “controlled burn” to clear undergrowth ran away from them and destroyed 400 houses.
Yellowstone – Bear Stearns, Lehman Brothers, current economic predicament.
Los Alamos – Recognizing the problem and the perils of trying to make up for past mistakes.
I have often found a good analogy helpful to understand or explain a concept. It is easy to push one too far, but if used properly it can be a good tool. Is this one accurate or helpful? What do you think?
Sources
http://en.wikipedia.org/wiki/Cerro_Grande_Fire
http://en.wikipedia.org/wiki/Yellowstone_fires_of_1988

 

[Bonzi Lighthouse]

But do we want, the Government SPENDING ANY money on jobs?

 

[hazyintentions]

But do we want, the Government SPENDING ANY money on jobs?

According to a majority of the Nation that answer would be a "NO."

 

[mame]

The difference between Keynesian and Austrian economics is that the Keynesians use math and evidence and the Austrians use analogies and stories.

And yes, we do want to spend money on roads and bridges - especially right now, as it'd improve the dismal economy; We are in a liquidity trap after all, and so fiscal expansion is necessary.

 

[Bonzi Lighthouse]

The difference between Keynesian and Austrian economics is that the Keynesians use math and evidence and the Austrians use analogies and stories.

And yes, we do want to spend money on roads and bridges - especially right now, as it'd improve the dismal economy; We are in a liquidity trap after all, and so fiscal expansion is necessary.

Ok I agree, we need to spend on infrustructure...... How do we pay for it?

 

[Bonzi Lighthouse]

I need to remodel my kitchen, how should I pay for it? Do I give up steak dinners for the next 30 years? Second on the house? I have plenty of credit and hey it will put people to work.

 

[hazyintentions]

The difference between Keynesian and Austrian economics is that the Keynesians use math and evidence and the Austrians use analogies and stories.

And yes, we do want to spend money on roads and bridges - especially right now, as it'd improve the dismal economy; We are in a liquidity trap after all, and so fiscal expansion is necessary.

The difference between the two is conjecture, the only thing that matters is results, and guess what I don't see any results.

 

[newatit2010]

Well I hear the debt is 1.3 trillion plus maxine wants a trillion plus odummy wants 9.3 billion for union infurstructer +++++++++++++++++++++++++++++ what every china india and brazil will lend us. HAHAHAHAHA

 

[mame]

Interest rates are at historic lows and our debt to gdp ratio has been much higher before. Hell, Japan's debt to GDP has been as high as 200%! We have plenty of room to borrow now. Besides that, reaching full employment - even if it's achieved via massive short term government spending - is the absolute best move the government could be making in the short to medium term for our deficits; At full employment the White house projects that our deficit would be 600 billion, which assumes the wars are still going on and the bush tax cuts continue... what are our current deficits atm? 1.4 trillion? So we could go from 1.4 Trillion deficits per year to ~600B per year largely just by reaching full employment (also, the deficit is partially inflated by the first stimulus which is being paid off almost entirely in the last couple fiscal years).

Also, the largest holders of US public debt are US institutions (mostly the Federal reserve, big banks, etc) - not China; I'm pretty sure China is our single largest foriegn debt holder, though.

 

[dukeanthony]

Only thing the Republicans want is a shitty economy
They think they can ride a wave a discontent into the oval office

/end of discussion

 

[mame]

On the Inadequacy of the Stimulus

I don’t think I’ve ever put up a simple explanation of why the stimulus was so clearly inadequate to the task. By the way, my point here is not what Obama shoulda-coulda done; I just want to look at the straight economics.

So here’s the thing: the financial crisis, and in particular the popping of the housing bubble, had two big effects on spending. One was that housing investment plunged from well-above-normal to well-below-normal levels. The other was that consumers suddenly increased their savings. Here’s a picture, with the red line showing residential construction as a percentage of GDP and the blue line showing the personal savings rate:

Put these together and you have a negative shock on the order of 6 percent of GDP.

Against this you had a stimulus bill of $800 billion — except $100 billion of that was AMT extension that was going to happen anyway, another $200 billion was other tax cuts of dubious effectiveness, so you were left with $500 billion of spending, spread over more than 2 years — maybe 1.5 percent of GDP or less.

It just wasn’t big enough to do the job.

edit: BTW, FRED is getting pretty epic for graphmaking if anyone is interested - so many tools and options!

 

[hazyintentions]

Interest rates are at historic lows and our debt to gdp ratio has been much higher before. Hell, Japan's debt to GDP has been as high as 200%! We have plenty of room to borrow now. Besides that, reaching full employment - even if it's achieved via massive short term government spending - is the absolute best move the government could be making in the short to medium term for our deficits; At full employment the White house projects that our deficit would be 600 billion, which assumes the wars are still going on and the bush tax cuts continue... what are our current deficits atm? 1.4 trillion? So we could go from 1.4 Trillion deficits per year to ~600B per year largely just by reaching full employment (also, the deficit is partially inflated by the first stimulus which is being paid off almost entirely in the last couple fiscal years).


Also, the largest holders of US public debt are US institutions (mostly the Federal reserve, big banks, etc) - not China; I'm pretty sure China is our single largest foriegn debt holder, though.

Honestly, I am glad this issue has come up because I was spending some time reading on Austrian economics and Keynesian economics.

At the end of the Great Depression Roosevelt did spike this country from the Depression with government programs promoting building infrastructure, along with his economic reforms and new regulations, thing is the country slipped right back into the depression 4 years later.

I am all for the government spending to build infrastructure and enhance and streamline our energy independence.

Problem with your belief system is that you rely on government to do this seamlessly when in reality most central government (especially ours) are inefficient and this tactic fails.

Government doesn't create a good economy, so far, government has done an admirable job of failing to sustain a healthy economy over the past 2 decades.

Why are you okay with almost 100% GDP? that's insane. Just because some other country that is well off by be doing it doesn't mean it's for us, thats why we are supposed to be the leader of the free world, pfftt.

Now there is a man who is well versed in Austrian economic theory and guess what? He predicted the bust and collapse, and pretty much word for word said what was going to happen, and this man still predicates this stuff accurately.

Show: Morning Joe
Channel: MSNBC
Date: 5/15/2009
Transcript
Joe Scarborough: Congressman, it’s great to see you again.
Ron Paul: Thank you.
Joe Scarborough: Any response to Nancy Pelosi accusing the CIA of lying to her yesterday?
Joe Scarborough: Well, I think it’s great theater and all this excitement over the torture and the CIA, I think, is very beneficial because it distracts from the steamroller of big government going on in Congress, and hopefully it will be beneficial.
But it’s also beneficial in trying to find out what’s going on, but just think, we wouldn’t have this discussion if we had just followed the law. Our law prohibits torture, as well as international law.
But the fact that this discussion is here and “who said what” is good. I have no idea who is telling the truth, but I know it’s very good for the country to get to the bottom of it.
Mika Brzezinski: But unfortunately, sir, now the story is really about Nancy Pelosi and the Speaker of the House and what she knew when instead of quite frankly, perhaps the discussion and the exploration of what we need to be doing as a country, whether it be following the law pertaining to torture or changing the rules.
Ron Paul: Yes, I know there are some shortcomings, but overall, I think it’s a benefit because she might slow up on nationalizing healthcare and further nationalizing education. Maybe things will slow up because we are quickly socializing the country and spending ourselves into oblivion and bailing out all of Wall Street, so maybe that will be a distraction from that, but you’re right. Maybe this will not lead to getting to the bottom of it because the administration is not that all interested in prosecuting the people who broke the law.

Joe Scarborough: You know, Ron, I’m writing a book. I’ve written a book, talking about the future of the Conservative movement and I tried to go back to figure out when the big mess began that lead to this collapse and there were a few people, Peter Olsen at AEI, and even the New York Times article that was written in 1999 warning about Freddie and Fannie.
A lot of warnings out there, Alan Greenspan also issued warnings, but I was stunned by reading a statement you made in the banking committee –
Mika Brzezinski: Ah, yes.
Joe Scarborough: — on September 10th, 2003. In fact, I’ve reprinted the whole thing in my book. I want Americans who hear leaders saying everyday, “We could not have seen this coming. This was a shock. How did this happen?”
I want to read what you said five years before the collapse.

“The special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital that they could not attract under pure market conditions. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing,”
​

Mika Brzezinski: Oh, my God.
Joe Scarborough: — and you go to say because so many people will invest in housing, “the damage will be catastrophic.” Congressman, how could it be that you knew this and told the banking committee in 2003 and nobody else did until after the collapse?
Ron Paul: Well, I would think that the easiest explanation is that Washington, DC is permeated by Keynesian economic thinking. Very few even know the name of Austrian Economics and understand the business cycle. I was concerned about the building of the bubble since 1971 when gold was delinked from the dollar. So since that time, the bubble has been gradually being inflated, but it got out of hand in the 1990s as well as after 2000, Bernanke taking interest rates down to one percent.
To me, the biggest surprise, although I was very concerned in 2003, I was concerned before that, I was surprised it lasted to 2007. That’s when the bubble really burst, but it was amazing how long it last, and to me, the more amazing thing right now is not only has the financial system collapsed, which is very, very bad and very dangerous, I believe that we’re moving towards now is the collapse of the dollar, and the collapse of the dollar because it’s the international reserve currency, I think is going to be much worse than we have already witnessed.
Joe Scarborough: Can you all believe this prediction in 2003?
Mika Brzezinski: Yes, that is, I mean, prophetic, absolutely prophetic.
Joe Scarborough: Talking to everybody in the banking committee and telling them, “Hey, we’re in trouble. Let’s not go this direction.”
Mika Brzezinski: Right.
Joe Scarborough: What are we going to do? And then, you know, Ron, somebody that probably didn’t vote for you, a Columbia economist, Jeffrey Sachs came on this show and said, “What we’re doing now with these economic policies is rebuilding another bubble and creating debt, more debt.”
Ron Paul: Well, they’re trying, but they’re going to have a difficult time re-inflating the bubble. To me what is disturbing is those individuals who did not predict what was to come are now predicting that the downturn has ended. “It’s over. At the end of the year, we’re going to have growth.”
They’re still listening to the Bernankes of the world, and yet they were completely wrong before. Greenspan was wrong, Bernanke was wrong, but all of a sudden, “Oh, I know. The end has come.”
We got in our trouble by spending too much, borrowing too much and inflating too much, and now, that’s all they’re doing and now they are predicted, and they’ve given credibility of knowing how to predict the end of this downturn. That’s to me astounding.
Joe Scarborough: Hey, Ron, not only that. The very people that sat in your committee when you told them what was going to happen remained silent and in fact, some accusing you and other Republicans that were critical of Fannie and Freddie of being racist, hating poor people. Those very people that missed all the warning signs were then put in charge of the trillion-dollar rescue.
Ron Paul: But Joe, you got to give them a little bit of credibility here on this argument because, you know, I was still on the fringe back in 2003. Nobody cared what I was saying. Now, at least, I have 100 or 200 people who care, so I’m getting a little bit more attention.
(LAUGHTER)
Ron Paul: And it isn’t so much me. I’m just reciting what I’ve learned by studying free market economics and we haven’t had free market economics. Now, they’re blaming capitalism for all these problems with not enough regulation. We’ve had crony capitalism. We’ve had inflationism, corporatism, big government. We’ve had no… we’ve not had true free market capitalism.
So we have to define it. Somebody asked me what individual is the cause of this problem? I would put them all in the shoulders of Keynes.
Mika Brzezinski: Yeah.
Ron Paul: You know, it’s a long time since he’s been around, but Keynesianism exists. Remember what Nixon told us, “We’re all Keynesians now.”
That was when the last link of the dollar to gold was removed and since that time, we’ve had nothing more than these bubbles and big government but it is coming to an end. We can’t afford this foreign policy or these bailouts.
Joe Scarborough: Exactly.
Mika Brzezinski: Carlos.
Joe Scarborough: We are out of money. We have got to show restraint and Holman was restrained overseas. Carlos.
Carlos:Congressman, to that point about restraint at home and restraint overseas, how would you cut, not just the deficit, but the debt if you have the presidency?
Ron Paul: Well, I would start overseas because politically it’s more palatable. Sometimes a conservative will come up and they’ll have an amendment and cut five percent out of child healthcare. You know, I don’t believe in the government being involved in medical care, but that’s not where I would cut.
I would cut overseas spending. To operate our empire costs us a trillion dollars, so I’d bring our troops home. You know, we had this supplemental bill yesterday. The president asked for $84,000. What did the…
Joe Scarborough: $84 billion.
Ron Paul: $84 billion. What did the Democrats do? They raised it by 14 percent, another $12 billion. The Republicans have one chance to cut and they had one amendment and they asked to increase it by $3 billion. Where is the credibility?
Carlos: Congressman Paul. Congressman Paul. What else would you cut because as you just said that wouldn’t be enough. If you were just to cut defense spending, you still wouldn’t get there.
Joe Scarborough: Right.
Ron Paul: How about getting rid of the Department of Education and Department of Agriculture. Just go down the list. Get rid of it. Cut it, cut the budget in half.
Joe Scarborough: All right.
Ron Paul: Everything that is not constitutional, that’s a good place to start.
Joe Scarborough: All right, Congressman, thanks you so much for being with us.
Ron Paul: Thank you.

With that said, Austrain economics is much more than ideals and loosely laid thoughts. I will await your reply.

 

[tomahawk2406]

Honestly, I am glad this issue has come up because I was spending some time reading on Austrian economics and Keynesian economics.

At the end of the Great Depression Roosevelt did spike this country from the Depression with government programs promoting building infrastructure, along with his economic reforms and new regulations, thing is the country slipped right back into the depression 4 years later.

I am all for the government spending to build infrastructure and enhance and streamline our energy independence.

Problem with your belief system is that you rely on government to do this seamlessly when in reality most central government (especially ours) are inefficient and this tactic fails.

Government doesn't create a good economy, so far, government has done an admirable job of failing to sustain a healthy economy over the past 2 decades.

Why are you okay with almost 100% GDP? that's insane. Just because some other country that is well off by be doing it doesn't mean it's for us, thats why we are supposed to be the leader of the free world, pfftt.

Now there is a man who is well versed in Austrian economic theory and guess what? He predicted the bust and collapse, and pretty much word for word said what was going to happen, and this man still predicates this stuff accurately.





With that said, Austrain economics is much more than ideals and loosely laid thoughts. I will await your reply.

than much more regulation and control must be used by the government on american economics, you saying our government threw caution to the wind and allowed banks and big business such as securities, investment, and insurance firms to practice much more FREE practices........OH WAIT thats not capitalism, thats more government hands in my business........... pick a side. i know that the government needs an overhaul but unfortunately it needs to be in some minor socialistic terms.

 

[hazyintentions]

than much more regulation and control must be used by the government on american economics.

show me where I said or inferred that.

 

[dukeanthony]

Ron Paul Hauled out the horse and sparrow economic plan from 2 centurys ago

In the Horse and sparrow model
You feed the horse in the front
And the Sparrows get to eat the shit
that comes out the back

We are the sparrows

 

[hazyintentions]

Ron Paul Hauled out the horse and sparrow economic plan from 2 centurys ago

In the Horse and sparrow model
You feed the horse in the front
And the Sparrows get to eat the shit
that comes out the back

We are the sparrows

Obviously you cannot even show a middle ground here and admit that while everyone ignored him he has been warning us of what was to come for years. It's logic for me.

How is accurately forecasting an event that comes true almost to the "T" feeding someone shit?

Would you call the weatherman who called for rainstorms while it was a monsoon full of shit as well?

That is what you come across as to me.

 

[dukeanthony]

Obviously you cannot even show a middle ground here and admit that while everyone ignored him he has been warning us of what was to come for years. It's logic for me.

How is accurately forecasting an event that comes true almost to the "T" feeding someone shit?

Would you call the weatherman who called for rainstorms while it was a monsoon full of shit as well?

That is what you come across as to me.

Oh hail the great turtle fucking messiah

 

[hazyintentions]

Oh hail the great turtle fucking messiah

Point in case, you bring no intelligent side to this issue at hand.

mame, while I respectfully disagree with your beliefs I want to thank you for being straight with me. I enjoy bouncing my head off others. It brings perspective.