Anyone still believe the economy is Bush's fault??

[rjd970]

Simply put, Clinton brought back the old Community Reinvestment Act and the rest is history.

It played a part, but absolving everybody except Clinton for this mess is blindness by partisanship.

 

[BigPapaVol]

Simply put, Clinton brought back the old Community Reinvestment Act and the rest is history.

CRA is a disaster and Fannie / Freddie was the real enabler there, but nobody made investors accept trash "insurance" in credit default swaps to convince them to buy enormous pools of really shoddily underwritten mortgages. Those were the public markets and stupidity abounded.

 

[J-P]

Its pretty simple, the less the goverment is involved in the economy, the better. They need to stay out of the auto, banking, and health care businesses.

Obama believes the governemnt needs more control, and we should trust them to do the right thing with our money.

I don't trust the government to walk one of my dogs.

I share the same affection for government that our founding fathers had for it after throwing off King George's yoke. The less government, the better, at all levels...

 

[volinbham]

But this is my whole chicken and egg point. Would the company need that person if no one is buying its products? Companies, small business or otherwise, don't keep people employed out of kindness. It is about maximizing the bottom line.

Certainty is critical to consumer spending.

Let's look at unemployment for what it is - it is growing because people are LOSING jobs. Lowering the costs of employment reduce the likelihood of layoffs thus reducing uncertainty and buoying consumer spending.

Compare that to giving folks an extra 10 bucks a week (the broad tax cut plan of Obama's stimulus). If a person is worried about losing their job, this money doesn't circulate.

How about dumping chunks of money into state's general budgets (another part of the Obama stimulus). It gets diffused among a myriad of special interests and general spending. Perhaps it spares some govt jobs but does very little to stimulate business or maintain private sector jobs.

It's hard to find anything in the Obama stimulus that is a job creator (save the infrastructure jobs that are eventually coming on line). What's been spent so far may have saved a small number of jobs but it's hard to see that any have much private sector impact.

More importantly, no business or employee sees any direct impact from the stimulus thus the spending crushing UNCERTAINTY remains. Money is on the sidelines waiting for the inevitable shakeout. To make matters worse, Obama has been predominantly anti-business in his tone and his policies. Add the uncertainty of HC and Cap and Trade and everyone is in wait mode.

Here's the proof - watch the upcoming Jobs Summit. I guarantee that proposals will be floated that are direct job creation (private sector) incentives. In the end, we will realize this is what the stimulus SHOULD have been.

 

[MG1968]

Keynesian economics, like socialism, will fail every time it's tried. The government simply cannot tax and spend the country into prosperity.

 

[rjd970]

Keynesian economics, like socialism, will fail every time it's tried. The government simply cannot tax and spend the country into prosperity.

Don't get me wrong, I definitely lean right when it comes to economic philosophy. I think the free market is a powerful tool for economic growth and innovation.

But Keynesian or free market in its purest form will fail everytime. A balance on philosopy is what gives the best results. One of the greatest economic expansions this country has seen happened when we had a Democratic president and a Repub Congress in the 90's....and likewise, it was the last time the budget was in the black. All we need to do is look and what happened to the deficit under Bush and now under Obama to see what happens when we venture too far off in one direction.

 

[rjd970]

Certainty is critical to consumer spending.

Let's look at unemployment for what it is - it is growing because people are LOSING jobs. Lowering the costs of employment reduce the likelihood of layoffs thus reducing uncertainty and buoying consumer spending.

Compare that to giving folks an extra 10 bucks a week (the broad tax cut plan of Obama's stimulus). If a person is worried about losing their job, this money doesn't circulate.

How about dumping chunks of money into state's general budgets (another part of the Obama stimulus). It gets diffused among a myriad of special interests and general spending. Perhaps it spares some govt jobs but does very little to stimulate business or maintain private sector jobs.

It's hard to find anything in the Obama stimulus that is a job creator (save the infrastructure jobs that are eventually coming on line). What's been spent so far may have saved a small number of jobs but it's hard to see that any have much private sector impact.

More importantly, no business or employee sees any direct impact from the stimulus thus the spending crushing UNCERTAINTY remains. Money is on the sidelines waiting for the inevitable shakeout. To make matters worse, Obama has been predominantly anti-business in his tone and his policies. Add the uncertainty of HC and Cap and Trade and everyone is in wait mode.

Here's the proof - watch the upcoming Jobs Summit. I guarantee that proposals will be floated that are direct job creation (private sector) incentives. In the end, we will realize this is what the stimulus SHOULD have been.

The bolded is what I have issue with. I can just as easily say because consumer spending is down, products aren't being sold, so people are losing jobs. A payroll tax cut isn't going to save jobs if nobody is spending anyway. Besides, it's a recession, even people with jobs are cutting back on spending. I disagree with the premise that a payroll tax cut will provide incentive for people to go out and spend again, all based on decreasing uncertainty.

Again, I don't agree with what Obama is doing either. Maybe a payroll tax cut would have been better, but it would be marginal at best.

 

[volinbham]

The bolded is what I have issue with. I can just as easily say because consumer spending is down, products aren't being sold, so people are losing jobs. A payroll tax cut isn't going to save jobs if nobody is spending anyway. Besides, it's a recession, even people with jobs are cutting back on spending. I disagree with the premise that a payroll tax cut will provide incentive for people to go out and spend again, all based on decreasing uncertainty.

Your bolded statement is not a chicken egg problem. The recession is the cutting back; it's not the cause of cutting back. It is the result. So the question is how to you spur economic growth and thus create the demand for jobs.

Uncertainty about the future and lost jobs are causes for reduced spending.

Having the government simply be the "consumer" for a year or two doesn't build true private sector demand. However, if people are earning paychecks they consume. Stimulus that is directly aimed at job creation solves the spending problem via the natural way demand is created. A payroll tax cut is essentially the government paying for jobs. It gets at the root of what creates demand. Jobs are the foundation of future demand. Future demand maintains jobs. Instead of a tax, they could directly pay employee salaries but there would be an uproar about picking winners and losers.

A government as consumer approach naturally creates a lag to job creation - employers must wait to see if demand is real since it is essentially coming from one giant customer. If instead it is coming from an employed base, it is a more stable demand thus it provides more certainty for maintaining employment.

Look at the WPA and CCC programs of the Great Depression - that was government spending that directly created jobs (I'm not advocating that here) but it's more focused than just dumping miniscule tax cuts and state funding out there and hoping that somehow creates jobs.

 

[gsvol]

 

[BeecherVol]

Its not really that hard to understand.

If you took a cut in pay, you would have to cut out (similar to cutting jobs) things you can live with out. If you can no longer afford them.

The cutting out of the things you can live with out, is not the problem. It is the reaction to the problem.