If and when do you think this stimulus plan will work?

Name dropping is a silly way to argue economics. For any economic position you can find some famous economist willing to take it up. I like to look at the numbers and data, not the name you are going to attach to your opinion.

It's true that the New Deal did not pull the country out of the recession, but that doesn't mean it was fundamentally flawed. A tax-hike and a decrease in government spending contributed to slow the economic progress, but if you compare the spending increases to the gdp increases there is a correlation.



In 1937, Roosevelt raised taxes and cut spending, and I share the opinion that his error in the New Deal was by not being ambitious enough.

Robert Gentel wrote:

It's true that the New Deal did not pull the country out of the recession, but that doesn't mean it was fundamentally flawed.

end of quote

It is true that President Bush spent Billions in Iraq,but that doesn't mean that it was fundamentally flawed(The Iraqis are now the second Democracy in the Middle East--Israel is the other one.

But, Mr.Gentel--sir-- if you want to probe the History of the Great Depression, I will be happy to do so.

First of all,the day after the Dow Jones was crashing again--down to121, Treasury Secretary Morganthau gave a speech to the Academy of Political Science in which he said that the war against the depression had required deficit spendingbut the emergency was ending and the government would now have to cut spending--He said--"WE WANT TO SEE PRIVATE BUSINESS EXPAND" "WE WANT TO BALANCE THE BUDGET".

In January 1938, UNEMPLOYMENT was at 17.4 %and the Dow Jones stood at 121.

Perhaps the most telling point was madeby Roosevelt's Treasury secretary--Henry Morganthau--who wrote in his diary--We have spent more and more money--It did not do any good"

(The last three paragraphs are based on information from Amity Shlaes's book--"The Forgotten Man"

I note that you say that FDR and the Democrats did not solve the Depression's problems,Mr. Gentel. I commend you for your honesty. I am afraid that Obama is following the same path as FDR--using up a large part of available monies, which then will not be available for private industry--and we will have a depression which, like the 30's will not only be painful but will be long.

Your idea that FDR should have done more may have helped him. {Perhaps you should contact the Treasurer of the US to give him the benefit of your idea. We certainly would not want Obama failing likeFDR did.

Hawkeye 10 wrote:

I think that it is true that those who demand government intervention have not proven that government intervention is helpful in the long term. Most of the world either believes in government intervention or has at least been presured into engaging in it. However they often demand public ownership of the assets in return (nationalization), and that difference may turn out to be important.
end of quote
A`great and succinct paragraph which says more than the large majority of posts on this thread. It goes right to the heart of the problem.

Here is a letter sent to a bank.


Dear Sirs:
One of my checks was returned marked "insufficient funds". In view of current events in the banking market, does that refer to me or to you?

Very good! Worth a belly laugh.

why even send out a cheque ; do what california is doing :



if you want your tax refund , you'll be zapped by the gubernator - after he gives you his autographed picture .

Fortunately for us, our refund is only $45. We can live without it.

And there you went with name dropping again. As I've said, I don't really care what name holds your position, I like to look at the data itself. And it doesn't matter if the Treasury Secretary thought that no amount of spending helped, I want to look at raw data and see if it did for myself.

So what data (not name dropping mind you) do you want to "probe"?

Odd. California is withholding money they owe; the congress is falling all over itself to give away money it doesn't have. Wonder which tactic will be the winner.

walmart

I'd like to see a provision in one of these upcoming economic laws that requires both federal and state agencies to produce an audit of all their unused cash reserves and unspent cash allocations before much more is handed out.

For example, the digital tv converter box coupon program. How much is in the account that has been allocated to unredeemed government coupons? I know of at least two of them, the ones I received and didn't have extra money to make use of them before they expired. Is that unclaimed money going to sit in an account somewhere indefinitely or does it get swept into the general fund after a certain date?

There must be billions and billions of similar "leftovers" on the government books at all levels, that need to be made use of before more is added.

Such a thorough review would put thousands of bean counters to work, too.

the paragon of american capitalism was Milo Minderbinder who created an enterprize system that gets fresh eggs to his mess hall by buying them in Sicily for one cent, selling them to Malta for four and a half cents, buys them back for seven cents, and finally sells them to the mess halls for five cents. But, it soon is revealed, without any evidence of growth, to be a large company, and then becomes an international syndicate, including Milo being the Mayor of Palermo, Assistant Governor-General of Malta, Shah of Oran, Caliph of Baghdad, mayor of Cairo, and the god of corn, rain, and rice in various pagan African countries. Whenever Milo appears in one of his cities, it is declared a holiday, with impromptu parades forming around him everywhere he goes. Milo explains it all with "the profit comes thru volume"

Transcript of Remarks by the President on the mortgage crisis

Executive Summary of the Plan

Fact Sheet

Housing Example Sheet

Consumer Q&A

The above links are also found at whitehouse.gov in two of the latest blog entries:

http://www.whitehouse.gov/blog/09/02/18/Help-for-homeowners/

http://www.whitehouse.gov/blog/09/02/18/9-million-plus/

You may be right, Robert Gentel---It is not important to listen to or quote anybody even if they are Secretary of the Treasury or Secretary of Defense or the President of the United States.

But, you say that you would like to look at the data itself? Very good and admirable. But which data would you look at?

Would you look at the data provided by President Obama which says that his stimulus package will create four million jobs? Or would you like to look at the data from the Congressional Budget Office which says that between 1.5 and 3 Million Jobs will be created by the stimulus?

Would you like to look at the BLS data that says that we now have a 7.6% Unemployment rate? Or would you like to look at the data which says that if we include U-6, we now have a much higher Unemployment Rate than that because U-6 includes "discouraged workers"?

Which data would you look at? I will be happy to provide you with data which will often show your data to be skewed.

Numbers and data are fine, Mr.Gentel, perhaps the best proofs to use, but I am sure you are aware that they can be manipulated.

And, You may think that the comment of the Secretary of the Treasury(Morganthau) "doesn't matter".

FDR would not have agreed with you since FDR thought that Morganthau was the only man who could handle the massive spending in the 1930's.

Your comment indicating that FDR should have spent more( to achieve his goals) is interesting. It is like the thinking of the warhawks who thought that Johnson should have spent more in VietNam to win the war.

Both FDR and Johnson saw a much higher level of spending as politically unwise.

Politics does drive politicians, you know!

Dyslexia's comment about Milo Minderbinder--A chief character in CATCH 22, was interesting but not specific.

Note:

lo Minderbinder
quote
Representing an extreme version of capitalist free enterprise that has spiraled out of control, Milo seems simultaneously brilliant and insane. What starts out as a business in black-market eggs turns into a worldwide enterprise in which, he claims, “everyone has a share.” At first, Milo's syndicate seems like a bit of harmless profiteering; we cheer for Milo because he is at least making money at the expense of the ridiculous bureaucracy that perpetuates the war. Like Yossarian, he bends the rules toward his own benefit; his quest for profit seems logical compared to the way Colonel Cathcart sends his men to their deaths just so he can get a promotion. All the men seem to like Milo, and they are perfectly willing to fly him to places like Malta and Egypt so that he can buy and sell his goods.

Milo's racket takes on a sinister air, however, when he bombs his own squadron as part of a deal he has made with the Germans. Many men are wounded or killed in this incident, and Milo's syndicate suddenly seems like an evil force that has expanded beyond anyone's ability to control it. But Milo's reasons for bombing the squadron are no more arbitrary than Colonel Cathcart's ambitiously volunteering to send his men to dangerous Bologna. In fact, one could argue that Milo's actions are more rational than Cathcart's, since Milo is guaranteed a profit, whereas Cathcart does not really have a chance of becoming a general.

In many ways, Milo's character shows how capitalism transcends political ideology. We are never given any idea of what the war is being fought over, and the men have no sense of defending the ideals of their home country. Milo's ability to make money off of both friend and enemy, and his willingness to support whichever is more profitable, take advantage of the complete lack of ideology in Catch-22. Furthermore, his willingness to allow his own camp to be bombed shows his complete disregard for the sides drawn by the war, and the men's acceptance of payment for being bombed shows that Milo is not alone in placing a high value on making money.
**********************
endof quote
The first line points out that Minderbinder represents an EXTREME version of capitalist free enterprise.

The last line implicates the people(men in the camp) "acceptanceof payment for being bombed shows that MILO IS NOT ALONE IN PLACING A HIGH VALUE ON MONEY.

I do not think anybody has a real answer to the question of this thread. I also believe most of us are aware that this stimulus plan has too much social programs, and the rescue of bad businesses included in it such as the US auto companies. Social programs must be paid through revenue from income taxes; otherwise it only transfers the larger deficit to future generations which creates a handicap for them.

Rather than our government trying to resuscitate auto companies who's real future is to go bankrupt is not a good investment by any term. Rather, it makes more sense to invest in new companies with real futures such as in technology, alternative fuels, ecology and medicine. That's where the future economy will grow. New auto companies will sprout out of the need for more efficiency and better quality.

Here's another point that needs mentioning: Although people are holding back from buying homes and cars, these areas has great potential in the future from the pent up demand now being created. It's a matter for our government to stabilize the housing market, but concentrating only on those who purchased homes without the required minimum down payment and/or income should be allowed to lose their homes. Those more responsible are the ones who should benefit from any stimulus package; either through tax credits and/or lower interest rates.

There seems to be a definite turn-around in the housing market - although slowly. On the other hand, it is obvious that more families will be losing their homes as they lose their jobs. As the equity in homes continues to drop, the tax base for state and local government also drops which affects our schools and security.

From that perspective, it should be our governments first goal to create jobs, and forget about funding social programs for now.

The rest will take care of themselves after our economy is stabilized.

What do you think?

Government's job is to look after the best interests of the many, those who are with us now, and will be in the future. Providing jobs for millions may do this, but that depends on a whole lot of things....what kind of jobs, what is the product of those jobs, what is the skew that this job making creates in the job market, how does this job making square with the professed belief in free markets and capitalism, where is the line between supporting the psychological well being of the nation and facilitating the avoidance of problems in need of reforms, what is the cost per job, will enough jobs be created to matter.....

Those are questions nobody can answer right now. To "create jobs" means just that; not all are going to pay top dollar, but they will be jobs - as in any economy. Most people prefer jobs over not having a job.

Obama's jobs are kinda on the expensive side. His outside hope is to create 4 million jobs which ain't much. He also plans on a system with weak controls, where the wealth can be skimmed by the corporate class and never get down to those it was intended to help. Obama could have created jobs on the FDR scale (12 million) for the same or less money if he wanted to do so. He should have done this, let the system work itself out through bankruptcies but let all individuals who are willing to work do so doing stuff that is good for America in return for a government paycheck.

we could be through this mess in just a few years, and then start to rebuild. As it is we are going to drag out the collapse at great expense to our kids and not deal with the reforms and rebuilding for the foreseeable future.

No, it isn't. It's because you only look at what the stimulus plan will create; not all the jobs that will follow from the jobs created by the "plan." It's really Economics 101; when jobs are created, they will in turn create more jobs to meet the demand of those already earning income. There is no way to determine the pyramiding effect of this plan, because it's never been done before - in this kind of world economic crisis. Compared to previous recessions and depression, the economies of the world are now combined and consolidated in so many different ways, there is no way to compare the present with the past. It wasn't that long ago that our world didn't have personal computers and cell phones. Have you ever visited a busy port in any country where thousands of containers are being loaded and unloaded?

It's a different world today.