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Change Has Come

From The Week:

51 Responses to “Change Has Come”

  1. Yu-Ain Gonnano Says:

    But can we believe in it? :-)

  2. Kristopher Says:

    Sure … as long as they don’t get to decide where the money gets spent, they will be against spending it.

  3. anon Says:

    The prospect of a socialist revolution has a way of clarifying ones thinking…

  4. tgirsch Says:

    The prospect of socialist revolution increases during GOP administrations. The prospect of an orderly socialist takeover increases during Democratic ones. :)

  5. DirtCrashr Says:

    When has a Socialist Takeover ever been orderly? It’s always preceded by a manufactured crisis of their own making.

  6. tgirsch Says:

    Well, that depends if one believes the Western Europeans are really socialists, or if routinely calling them that is just a transparent rhetorical ploy. (I have my suspicions.)

  7. Lyle Says:

    Let me get this straight; the Republicans are flawed beause they’re too much like Democrats, so therefore you support Democrats?

    Ot is it;

    Why settle for half bad, when you can get all bad? I’ve often pondered that myself.

  8. tgirsch Says:

    False dilemma often?

    Seriously, though, if you’re reading anything more into the comic than “it’s amusing that the GOP has suddenly found Jesus on fiscal discipline now that they’re out of power,” you’re reading far too much into it.

    (And, of course, the GOP hasn’t actually found any such Jesus — they just want more tax cuts, which would still throw the budget even further out of balance…)

  9. anon Says:

    “The prospect of socialist revolution increases during GOP administrations. The prospect of an orderly socialist takeover increases during Democratic ones.”

    I have plenty of ammo either way.

  10. Dan Says:

    Where are the vaunted blue dog democrats, those, bastions of fiscal conservatism? Why are they not fighting against the bill, with the Republicans? Oh yeah, the blue dogs were just a front to trick stupid morons. This monstrosity proves a absolute point: if you have a conservative dem and a conservative repub., always choose the repub. As bad as the repubs were, at least almost all of them came to their senses and voted against this thing.

    Oh yeah, am I the only one getting sick of the standard liberal response of when questioned about how inane this bill is by ‘well, republicans spent a lot too?’

  11. tgirsch Says:

    Dan:

    As previously pointed out, the Republican stance on this isn’t fiscally conservative, either. The number of “fiscal conservatives” from either party in either chamber seems to be pretty close to zero at this particular juncture.

    And the liberal response isn’t so much that “Republicans spend a lot, too”; it’s more that the Republicans weren’t complaining when their massive spending and their massive deficits were the rule of the day. That’s not a defense of the stimulus package, just a marker of GOP hypocrisy on spending and deficits. It was, after all, the Patron Saint of Republicans who pushed the “deficits don’t matter” mindset.

    If you want to seriously discuss the merits and drawbacks of the stimulus package (there are many of both), we can certainly do that, but that’s irrelevant to the question of whether or not one can take gentle ribbing without getting all self-righteous.

  12. Linoge Says:

    Well, there might be hope for the Republican party after all.

    Unfortunately, I doubt this will stick.

  13. Dan Says:

    Fact remains, tgrisch, that the blue dog democrats are just garbage, a fantasy. A ploy used to sucker nincompoops that believed there are any number of conservatives in the democratic party.

    But the crux of what I was talking about was mainly about blaming Republicans as the main counter talking point, although you have refined it somewhat.

    No liberal responses say specifically about why this is a good bill. Forget its the ‘republicans and bush’ fault (not forgetting who owns the congress and also being reminded that half the money for that was not spent by Bushy), why is this bill necessary?

    The tax cuts would be best solution to cure this financial mess, next to that, doing nothing. This spending bill is a disaster.

  14. Tam Says:

    LOL!

    It’s sad that the only way to make them act like Republicans is to have them in the minority.

    Kinda like the only way to keep Democrats from wild foreign military adventures is to keep them out of the White House. *koff* *koff*

  15. DirtCrashr Says:

    Tom McClintock, February 10, 2009 – on the Floor:We are already running a $1.2 TRILLION dollar national deficit this year Ė with a spending bill racing through Congress to add another $800 billion more on top of that.
    Letís put that in perspective. A $2 trillion deficit. Thatís 150 times the size of the annual deficit that has brought California to the brink of bankruptcy.

    They have not been able to explain how government can inject a single dollar INTO the economy that it has not first taken OUT of the economy.

    If this policy worked, we should already be enjoying a period of unprecedented economic expansion. The bailouts, spending and loan guarantees now total $9.7 trillion. As Bloomberg pointed out last week, thatís enough to pay off 90 percent of all the home mortgages in America. Not 90 percent of the bad mortgages Ė 90 percent of the TOTAL mortgages.

    One more than zero, but one ignored.

  16. tgirsch Says:

    Fact remains, tgrisch, that the blue dog democrats are just garbage, a fantasy.

    No different, really, than the blue state Republicans who never bothered to vote against the party line, either (which is why a lot of them got voted out, and why I suspect a couple of blue dogs will get voted out in 2010).

    No liberal responses say specifically about why this is a good bill.

    Just because you haven’t seen them or don’t agree with them doesn’t mean they’re not there. I could provide links to demonstrate that spending projects provide about one and a half times as much stimulus as tax cuts do, but what would be the point? You’d simply reject them. You’ve already indicated that you believe the GOP hype that says tax cuts are always the answer to all problems.

    From where I sit, it’s not a great bill; it’s too heavy on tax cuts, the tax cuts that are there are wrongly targeted from what I can tell, and it’s not heavy enough on the kinds of spending projects (mainly infrastructure) I think would get the best bang for the buck, both in terms of economic stimulus and in terms of facilitating future economic growth. But it’s not a terrible bill, either, and it’s worlds better than anything the Republicans have put forward.

  17. tgirsch Says:

    DirtCrashr:

    I’ve asked this of several conservative types who make the arguments you cite, and they never have an answer: Why is it that private sector investment is supposed to be a non-zero sum proposition, but public sector investment magically is zero-sum?

    And for the record, you needn’t worry much about taking money out of the economy right now, because the problem is that there isn’t much there, and what is there isn’t being invested in growth.

  18. Dan Says:

    Well tgrisch, sorry you bought the lie about this being a stimulus bill. And I never said that tax cuts are the solution to all problems, although, you are just simply parroting the standard liberal drivel on this subject.

    Explain to me, as referenced by the post above you, how is taking one dollar away from somebody and putting it back into an unproven economic device going to stimulate the economy? Would it not be better to let the people, that you know, hire people, keep that money and allow them to expand their business? Contrary to popular liberal belief, this is not free money and has to be taken from somewhere.

  19. straightarrow Says:

    If you take money out of the economy to put back in the economy a perfect result can only be no change in the economy, though some sectors may be favored over others, overall, no change. Not being a perfect world and not having anybody with integrity to handle the situation, by the time the rake-offs, kickbacks, pork projects, etc. are funded the economy will actually be much worse off simply because a good portion of the monies taken out of the economy will “disappear” well before they can be returned to it. This can be proven with a box of rocks and an empty box and a rock thief in control of enhancing the empty box in order to ultimately enhance the box that has rocks in it. It ain’t that complicated.

    Having said the above, anybody who can, with a straight face, laud either party’s performance is a fool.

  20. SayUncle Says:

    Tam wins.

  21. tgirsch Says:

    Uncle:

    Agreed, except for the “wild foreign adventures” part. Pretty much all such adventures that have happened in my adult life were with the GOP at the helm.

    Dan:

    You said, “The tax cuts would be best solution to cure this financial mess.” Your words, not mine. So okay, maybe you didn’t say tax cuts are the solution to all problems, but you certainly recommended them here. And as for the GOP in general, I can’t recall a time, in good economy or bad, when they weren’t arguing in favor of tax cuts.

    Explain to me, as referenced by the post above you, how is taking one dollar away from somebody and putting it back into an unproven economic device going to stimulate the economy?

    Good question. Of course, cutting taxes takes dollars away from people, too, either now or later. So I don’t see how this argument helps you.

    Would it not be better to let the people, that you know, hire people, keep that money and allow them to expand their business?

    In a good economy, maybe so. But the problem right now is that even if they had extra money, in the form of tax cuts, there’s no incentive for them whatsoever to expand, because it’s not the supply side of the equation that’s lacking — it’s the demand side. What sane business owner is going to expand her operations when nobody’s buying what she’s selling at current production? Giving her a tax cut doesn’t change that equation one iota.

    See, what’s needed right now, to generate more demand, is to put people to work. And it doesn’t matter at all whether it’s the government or the private sector that does it, as long as it happens. When people work, they pay taxes, they buy stuff, and they generate demand. When they don’t, demand falls. Right now, the private sector is losing more than half a million jobs per month, and that rate is accelerating. And they’re not cutting those jobs because their taxes are too high — if you believe that, you’re nuts.

    So I would love it if someone would explain how tax cuts are supposed to entice the private sector to hire more people when people aren’t buying enough of their goods and services to even justify their current staffing levels.

  22. emdfl Says:

    So by your reasoning tgirsch, the government should take $100 from my pocket, and use about $80 of it to pay the government bureaucrat who took the money. Then that bureaucracy will pass $20 along to their clients so said clients can go to the Rhode Island zoo and see the new polar bear exhibit or buy crack or whatever. And that is a better stimulus of the economy then leaving the money with me so I can spend the $100 at a local store to buy the paint to paint my house.

    Oh, and If you believe that high taxes DON’T enter into every business’s plans then you really are a democrat. Real slow.
    ANY MONEY THAT A GOVERNMENT TAKES FROM A BUSINESS IS MONEY WHICH THAT BUSINESS NO LONGER HAS AVAILABLE TO USE TO PAY ITS BILLS, INVEST IN EXPANSION, PRODUCE MORE PRODUCT, OR TO HIRE ADDITIONAL EMPLOYEES.

    AND please show me any time in the known history of the world where your (apparently) favored form of government, communism-lite/socialism, has EVER brought prosperity to any other then the ruling class.

    If you think that this POS is anything other then a payoff to the democraps vote base, you really do deserve what is coming down the tracks. What I don’t like is that the same train that is going to whack you will also probably whack me and millions of others who worked hard, paid their bills, and saved their money.

  23. Dan Says:

    Actually, it is not a maybe, I absolutely did not say it would solve all problems.

    “See, whatís needed right now, to generate more demand, is to put people to work. And it doesnít matter at all whether itís the government or the private sector that does it, as long as it happens.”

    – If what you are saying is true, why are places like Buffalo, NY in such the crapper? After all, their largest employer is the government, and yet, their economy is in the toilet. The only jobs that can save the economy are jobs that produce, which the government cannot provide in the long or short run.

    – Also, if what you say is true about government making jobs (such as the 5% going to infrastructure), when those jobs disappear eventually, what then?

  24. ATLien Says:

    Funny how revenues go up every time taxes are cut. But Lefties will never ever admit.

    Flip the frakking switch, i’m ready to fight.

  25. Tam Says:

    Pretty much all such adventures that have happened in my adult life were with the GOP at the helm.

    I’ll grant that you’re probably too young to remember JFK and LBJ’s little 10-year, 25,000KIA experiment in the Domino Theory, but you’re awfully articulate for an eight year old, which is how old you’d need to be to not remember all the fun deployments from Gothic Serpent to Haiti.

    Hey, maybe the new administration could figure out an exit strategy for Kosovo before working on one for Iraq…

  26. Tam Says:

    See, whatís needed right now, to generate more demand, is to put people to work. And it doesnít matter at all whether itís the government or the private sector that does it, as long as it happens.

    Yes, it matters.

    See, when the government employs people, where does it get the money to pay them? Class? Anyone? That’s right, taxes.

    And where does it get the taxes? Anyone? Bueller? That’s right, the people with jobs.

    Are you seeing the problem, here? The government doesn’t generate anything. If everybody in a closed system was working for the government, you would be, in effect, trying to pull yourself up by your own bootstraps. It doesn’t work.

  27. Joe Says:

    How the heck do you generate more demand by putting people to work. Mike-istan said it best in his blog when he pointed out that it doesn’t do any good having people work if they are producing things nobody wants.

  28. perlhaqr Says:

    If this policy worked, we should already be enjoying a period of unprecedented economic expansion. The bailouts, spending and loan guarantees now total $9.7 trillion. As Bloomberg pointed out last week, thatís enough to pay off 90 percent of all the home mortgages in America. Not 90 percent of the bad mortgages Ė 90 percent of the TOTAL mortgages.

    And, even though at first glance this seems like it would be a good thing, in that it would mean a lot of people suddenly had a lot more money available to spend on stuff that wasn’t mortgages, it’d probably really hose the property market, and create vast inflation.

    Just like any other plan of theirs, really.

    Tam: You’re too optimistic. It gets a lot of the money it spends by simply printing it. Which still doesn’t actually generate any wealth, and, in fact, makes things worse. But it doesn’t necessarily tie to tax revenues.

  29. tgirsch Says:

    Tam:

    You’re right — when LBJ left office, I was about -2.5 years old. The interesting thing is that unlike the Republicans, the Democrats seem to have learned from the Vietnam fiasco.

    And you’re right — the government gets the money to pay for stuff with taxes. I don’t think that’s as important or jaw-dropping a revelation as you seem to think it is, however. When the private sector employs and pays people, that money has to come from somewhere, too.

    Since we’re reviewing basic economics, pay attention, here’s the important part: the economy goes when money changes hands, and when it doesn’t change hands, the economy stagnates. So what’s the point of the Big Bad Government “stealing” money and putting it into circulation? The putting it into circulation part! The total number of dollars in the system doesn’t matter, so much as how many of them are moving around.

    Although I’m certain you’re more than prepared to wow me with your alternate plan of how you’re going to ask the private sector to pretty please start spending money again voluntarily, even when demand doesn’t justify doing so, and how that’s going to magically make it all better.

    The entire point of government spending projects in a down economy is that demand has fallen (by over $1 trillion last year alone); the government spending injects demand into the system in two ways: just by the very nature of spending money to build and buy stuff, and enabling the people that those projects employ to themselves put more money into circulation.

    But again, I wait with bated breath for your show-stopping alternate plan. As a libertarian, I’m guessing it’s somewhere along the lines of “Fuck it, let the economy crash and burn! The market has decided we should all be fucked!” :)

    Dan:
    If what you are saying is true, why are places like Buffalo, NY in such the crapper? After all, their largest employer is the government, and yet, their economy is in the toilet.

    Largest employer != only employer. How is your average Buffalo government employee faring as compared to his or her private sector counterpart in the current economy?

    The only jobs that can save the economy are jobs that produce, which the government cannot provide in the long or short run.

    If jobs that produce are the only ones that can save us, then we’ve been royally fucked since the 80’s, when we started shipping all of our production jobs overseas. That aside, the problem here should be so obvious as to smack you upside the head: what’s the point of producing what nobody is willing to buy? It’s a problem conservatives seem to understand just fine when the topic is the US auto industry, but for some reason they can’t make the leap and broaden the concept to the larger economy.

    The problem here is that the private sector isn’t producing because there’s no incentive for it to do so, and nobody has yet answered the question of why additional no-strings-attached tax cuts would give them any such incentive in the absence of demand.

    Also, if what you say is true about government making jobs …, when those jobs disappear eventually, what then?

    “As the economy stands up, we’ll stand down.” :) Seriously, though, that’s the thing. As the economy improves, the private sector will begin expanding hiring on its own. And as that happens, as long as the government jobs don’t disappear too suddenly, the workforce will transition back into the private sector. Remember, we’re talking mainly about people who have recently transitioned out of the private sector workforce, and not by choice.

    emdfl:
    So by your reasoning tgirsch, the government should take $100 from my pocket, and use about $80 of it to pay the government bureaucrat who took the money.

    Well, for starters, since taxes aren’t going up, and are in fact going down as a result of the stimulus package, they’re not taking $100 out of your pocket or my pocket or anyone else’s pocket, at least not yet. Eventually, somebody’s going to have to pay for it, but that’s likely to be our children, not us. And if borrowing from our children is a problem for you, you must despise Reagan and Bush, both of whom presided over a doubling of the national debt.

    But you do raise an important point, and one that too many people on both sides of the debate miss or ignore: the money does have to come from somewhere, whether it’s money for spending or money to pay for tax cuts. And none of it is coming out of anyone’s pockets today. We’re literally mortgaging the country’s future, and have been doing so for the last century or so. (I suspect that we as a nation are a subprime borrower these days.)

    And that is a better stimulus of the economy then leaving the money with me so I can spend the $100 at a local store to buy the paint to paint my house.

    Setting aside the fact that, as just pointed out, nobody’s taking $100 from you, what happens when you (and others like you) hoard the money rather than spend it? Or you invest it abroad where it doesn’t help the local economy? Or you don’t have the $100 to spend or save in the first place? Then what?

    Look, if you wanted to target tax cuts such that you only get them if you spend the savings in ways that directly stimulate the economy, then I’m willing to talk. Contrary to what you might think, I’m not reflexively opposed to tax cuts. I just want reasonable assurances that those tax cuts will be used to stimulate the economy in job-producing ways, unlike the last couple of rounds, which led to the much-maligned “jobless recoveries.”

  30. tgirsch Says:

    Joe:
    it doesnít do any good having people work if they are producing things nobody wants.

    Precisely! That’s why tax cuts won’t incent businesses to expand production capacity. Nobody wants what they’re making and selling right now. Why would they expand production, even if they suddenly found themselves with extra scratch?

    This is what’s good about the stimulus. You’d be hard pressed to argue that “nobody wants” roads, bridges, schools, and electricity, for example.

    Look, you might not think the arguments in favor of spending to stimulate the economy are very good or very compelling. The problem is, the arguments for cutting taxes (or for simply doing nothing at all) are even less compelling. It’s the underpants gnomes theory of economic stimulus:

    1. Cut taxes
    2. ?????
    3. Recovery!

    (By the way, replace step 3 with pretty much any objective you can imagine, and that same logic still applies to the GOP of the last decade or so.)

  31. Rustmeister Says:

    ????? = Business uses extra capital to invest and expand.

  32. tgirsch Says:

    OK, now give the rational justification for why the businesses would do that, when they’re not even doing that with the capital they have now.

  33. Dock Says:

    Tax cuts = less theft.

    I see this as a universal win for people and liberty. Earn it, keep more of it. Win.

    No Southparkian economic lessons needed.

  34. jimbob86 Says:

    “Of course, cutting taxes takes dollars away from people, too, either now or later. So I donít see how this argument helps you.” – Tgirsch

    I see the problem RIGHT THERE. Tgirsch thinks folks keeping their money is withholding it from others, and it is The Government’s JOB to make sure it is shared fairly……. Karl Krackhead and Sally Slacker are ENTITLED to some of your money, and will take it from you to give it to them…….. Socialism in a nutshell.

  35. tgirsch Says:

    jimbob86:

    A dollar spent is a dollar taxed, whether it’s taxed today or tomorrow. So every time you cut taxes without also cutting spending to match, all you’re doing is increasing somebody else’s taxes in the future.

    Nice try, though.

    Dock:

    If taxation = theft, then why not abolish all taxes?

  36. Canthros Says:

    tgirsch, I think your analysis only holds if spending per capita remains constant or increases and tax revenue per capita does not increase. Though you mention the former, you don’t seem to acknowledge the possibility of the latter. Given the behavior of tax revenue over the last eight years (for instance), this doesn’t seem reasonable.

  37. tgirsch Says:

    Canthros:

    Well, the only way you can say that tax revenues “increased” after the tax cuts of 2001 and 2003 is if you don’t correct for any of the other variables. Once you correct for population (the “per capita” portion) and/or for inflation, it’s clear that those tax cuts caused revenues to drop; at the same time, spending increased by any measure. So it was a double-whammy of crummy economics.

    In that respect, the stimulus package we’re seeing now is more of the same: increased spending coupled with tax cuts. The only real differences are of type (who gets the tax cuts, and what kind of spending) and the fact that severe recessions are one of the rare cases in which deficit spending is defensible. (The problem Obama faces, and McCain would have faced had he won, is that we were already so far behind the 8-ball at the outset that we’re in no shape to undertake any sizeable stimulus. It’s a devil’s bargain: damned if you do, damned if you don’t.)

  38. Mike Gallo Says:

    tgirsch, the government is like a battery. No matter what source you use to charge the battery, there is always net energy loss in the system; energy out will always be less than energy in. If Keynes had not been an idiot, he would have realized this physical principal applies to any system, chemical or economic.

    Stick to the cheap shots; you’re no good at making sense and by trying to be clever you just sound like an asshole.

  39. tgirsch Says:

    Mike Gallo:
    the government is like a battery. No matter what source you use to charge the battery, there is always net energy loss in the system; energy out will always be less than energy in.

    By all means, mystify me as to why this is true of government, but magically not true of the private sector. I await your profound and awe-inspiring explanation.

    And if I sound like an asshole, it’s because I am an asshole, a fact I’ve never tried to deny. :)

  40. Gunstar1 Says:

    So reducing taxes without cutting spending just means people pay more in the future. However that tax cut means money is kept by the person needing it. The bonus being the amount you get and distribute is direct. I pick and choose what I want to buy and make the best use of that money. More bang for the buck.

    1. Cut taxes
    2. people keep their jobs and businesses can afford to invest in themselves.
    3. Recovery!

    If cost of busness is the same and you are not getting as much money in, then something has to be cut. That is either in materials you buy (office supplies, raw materials, upgrading an old machine, fixing a leaky roof etc) or the people you employ. One way to reduce how much you spend is to reduce the amount of tax you pay.

    The other solution is:
    Not reducing taxes and vastly increasing the amount of spending. This is better? How?

    You still have to pay that debt off either way. However with the government being the one to pick where the money goes, a larger portion of that money will be wasted by the very nature of the government.

    If you must stimulate the economy and you know you must pay the money back. Why would you not want the option that produces the least amount of waste?

    Who can spend money more wisely and get more bang for the buck? The government or the private sector?

  41. Gunstar1 Says:

    tgirsch Says:

    By all means, mystify me as to why this is true of government, but magically not true of the private sector. I await your profound and awe-inspiring explanation.

    It isn’t absolute. They both are. However one is worse than the other. I will give you a hint, one routinly uses accountants and statistics to make sure they spend their money where it needs to go to get the best return, the other one doesn’t give a rats ass.

  42. straightarrow Says:

    tgirsch said,”Since weíre reviewing basic economics, pay attention, hereís the important part: the economy goes when money changes hands, and when it doesnít change hands, the economy stagnates. So whatís the point of the Big Bad Government ďstealingĒ money and putting it into circulation? The putting it into circulation part! The total number of dollars in the system doesnít matter, so much as how many of them are moving around.”

    NO! It’s your turn to pay attention. Money moving around doesn’t do one damn thing for the economy. It may do something for certain segments of the economy. But only those segments providing the necessaries to maintain life. The overall economy does not improve because money is moving. Sheesh! and you think you’re smart enough to tell someone else to pay attention. What a damn joke.

    Now you pay attention; you are about to be hit with an irrefutable truth. For an economy to remain healthy and viable wealth must be “created”. That can only be accomplished by producing a good or service whose value is greater than the sum of its parts. The service part of this equation is only a wealth producing aspect of the economy when it aids in the production of the finished product whose value exceeds the value of its components.

    That is exactly why the “service economy” that was so lauded just two decades ago is an abject failure. It didn’t create any wealth, it only moved existing money around. The total economy did not improve as a result of pure service. Again, pay attention. The service part of the equation only helps create wealth when it is in service of production of products whose value exceeds the value of the sum of its parts. Memorize it.

    I can buy 1,000 lbs of steel, 300 lbs of aluminum, various amounts of plastic, fabric etc. for a lot less than $45,000. And they are worth just what I psid for them. If I resell them, I may be fortunate enough to get what I paid for them if nothing is to be done with them except to change ownership of them. However, if I combine those components into a Lexus, they are now worth a Hell of a lot more than the value of the individual parts in toto.

    Even if I sell them to another for his use in turning these components into a Lexus, I should be able to make a profit because of the demand for those components if the demand for Lexi (couln’t help that) remains. Add in the service elements, engineering, design, build labor, etc. and wealth has been created. Thus there is actually a bigger pie. Not just the same eight slice pie that we just keep passing around.

    Just circulating money does nothing for the economy overall. Creating more wealth does. All economic models that do not recognize this inescapable have failed in the past and will without exception fail in the present and future. Simply because the wealth that exists will eventually gravitate to those suppliers of the necessaries of life, leaving less and less in the hands of consumers, who don’t “quit” spending, they simply can’t. Once that happens, people and firms who do create product have no market, when the market disappears so do the jobs of those still employed. The spiral deepens and tightens. Yet the money is still “moving”. Big fucking deal.

  43. tgirsch Says:

    Gunstar1:

    For your step 2, it only works that way if demand returns. But there still hasn’t been an answer as to how tax cuts of any kind will do much to offset a (so far) $1.2 trillion reduction in demand. Frankly, the stimulus as passed is probably way too small to do that, too.

    That’s the key part that I’m still waiting on an explanation for: What’s the incentive for a business to “invest in itself” and expand production/sales/whatever when there’s insufficient demand for what they’re making/providing today? Bush Sr. rightly described supply-side economics as “voodoo economics.” People aren’t going to buy more stuff just because there’s more stuff to buy. It would be economic suicide for a company to expand in the face of shrinking demand.

    Not reducing taxes and vastly increasing the amount of spending. This is better? How?

    Because it employs people when nobody else will. Look, if there were any evidence to suggest that business tax cuts would go directly to job creation, I’d be all in favor of them, but there’s simply no such evidence. In a demand-weak economy, the best way to increase demand is for some large party to start buying and building stuff. That large party is, in this case, the government. Building roads, bridges, communications infrastructure, energy infrastructure, schools, etc. employs people, at a time when the private sector is actually shedding jobs (and I’m still waiting for anyone to provide even a shred of evidence to suggest that the primary reason businesses are shedding jobs is because their taxes are too high…).

    Further, these projects all require supply chains: they’ll involve buying materials, getting materials to job sites, etc., all of which, if done at a sufficient scale, provides a cascading effect of job creation and, as a result, increases demand, spilling over into the private sector.

    The problem is that such a massive undertaking involves a crapload of up-front cost with essentially zero short- to mid-term profit potential. Thus, no sane for-profit entity will ever do that on its own.

    Who can spend money more wisely and get more bang for the buck? The government or the private sector?

    The answer is, it depends. When the economy is humming, then the private sector does a very good job. But when it’s not, the private sector tends to turtle up, leading to a downward spiral. And in times as tough as these, it’s not a matter of spending efficiently, although we should certainly strive for that. It’s a matter of spending period. If the private sector were even willing to spend and invest, that might adjust the equation. But right now, everyone’s taking a “you first” approach.

    Again, I’m not wholly opposed to tax cuts, but any such cuts we give out need to have strings attached, so that the found money gets used in ways that directly stimulate the economy. With direct spending, you eliminate the middleman by specifying that the money is to be spent, and even how it’s to be spent.

    I will give you a hint, one routinly uses accountants and statistics to make sure they spend their money where it needs to go to get the best return, the other one doesnít give a rats ass.

    There’s a whole host of banks and investment firms that currently stand in stark contrast to that assertion.

    straightarrow:
    [Wealth can only be created] by producing a good or service whose value is greater than the sum of its parts.

    You mean something like the electric power grid, or the interstate highway system, or the internet, or satellite communications?

    And as I mentioned before, if value/wealth only comes from production of tangible products, then we’ve been screwed since Reagan. Perhaps you think we should start re-instituting tariffs, in order to incent local production as opposed to offshoring that?

  44. Kristopher Says:

    Information is also a created good, and thus wealth.

    Speculators actually do create wealth … they help create price information, and often at great risk.

    One of the things the old Soviet Union could not do by itself was find a way to fix internal commodity prices … they committee in charge of that used a week-old copy of the Wallstreet Journal’s futures page, and some local political pull voodoo to fake it every month.

    Straightarrow: were you not aware of this? Or is Tgirsh making an assumption?

  45. tgirsch Says:

    Kristopher:

    I mostly agree with you, however, as we’ve recently learned, speculators can also drive unsustainable bubbles, such that the “wealth” they create turns out to be illusory in nature.

  46. straightarrow Says:

    speculators only create wealth by helping producers know and follow the trends of price/cost etc. in making their decisions. Speculation that does not do this, though, I can’t think of any that wouldn’t, would only relocate wealth. That is why there are laws against manipulating markets with false information.

    You mean something like the electric power grid, or the interstate highway system, or the internet, or satellite communications?

    Absolutely, except when done as a public project. Where does the money come from for those efforts? Uh huh! You got it. The money comes out of the economy, so the money goes back to economy,except of course for those monies that get “lost” in the bureaucracy. Net loss for the economy at the immediate point of completion for the economy. However, the value of these projects is that they allow private sectors of the economy to operate more efficiently and/or more effectively. Over time public projects such as you listed create a positive return to the economy, but not because of the project itself, but due to its use by the private sector to be more productive.

    To address a specific item you listed, let’s look at interstate highways. They were not built as an economic stimulus, but as a military access avenue on interior lines of logistics and communication. That they are useful for commerce is a collateral benefit, for some, and a detriment for others. Ask any town bypassed without an off ramp to the system.

    Because they made transportation of domestic goods more efficient the economy did in fact experience growth due to the system. Not from the building of it, but from its use by the private sector in being more productive. Even though there were sectors of the economy that suffered greatly from the system, the overall gain more than offset that. However, the economy didn’t expand by taking money from the economy to return only a portion of it to the economy in building the project. This seems to be beyond your ken.

    By the way, the internet shares the same genesis as the interstate system. And it did nothing to expand the economy until the private sector put it to use.

    I am not opposed to public projects, I am opposed to public projects that are just make work projects, or projects that are better done by others.

    I know you are a state worshiper but this isn’t about religion.

  47. straightarrow Says:

    As for the electric power grid, am I to assume you don’t think GE or Westhinghouse or Con-Ed or the many electric co-ops had nothing to do with its appearance on the American scene? It was all government? Do I have that right?

  48. tgirsch Says:

    All of the examples I cited came into being in their current form only because of massive government investment. And all of the examples I cited have paid for themselves many times over through the economic opportunities they created.

    And for purposes of the point I was trying to make, it doesn’t matter why they were built. What matters is that contrary to your claim that the government can’t create wealth, it did exactly that in those cases. You had exponential opportunities for growth as a direct result of these government-funded infrastructure projects.

    The private sector couldn’t have built the Hoover Dam, which still provides a quarter of the Southwest’s electricity to this day. Without it, Vegas simply couldn’t exist. The private sector can take advantage of these projects, but it simply cannot undertake them on its own.

  49. straightarrow Says:

    you just can’t comprehend the written word, can you?

    I am not opposed to public projects, I am opposed to public projects that are just make work projects, or projects that are better done by others.

    Get a fourth grader to explain the preceding paragraph to you.

  50. tgirsch Says:

    You’re the one who seems to have comprehension issues, because what I was addressing wasn’t whether or not you universally support or oppose public projects, but your risible statement that government spending can’t create wealth and opportunities for wealth far outpacing the amount spent by government. I listed several clear examples of government spending doing exactly that.

  51. straightarrow Says:

    No, it’s you who doesn’t comprehend. I addressed your statement the money “moving around” stimulates the economy. You’re the one who expanded the topic beyond that. Money just moving around does nothing to stimulate the overall economy unless wealth is ‘created’ by such movement. Money is alway a finite resource, without expanding the definite, just moving does nothing overall.

    That is where this started and all I addressed in my first comment.

Remember, I do this to entertain me, not you.

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