@joefromchicago,
And you are clearly the #1 Keynesian on A2K (seconded perhaps by Thomas).
I know it's so simple but perhaps you can educate me on how it's supposed to work.
Governmental stimulus spending (which requires great gobs of borrowing no matter how much taxes on the Rich are raised) will, inevitably, create an economic boom of such proportions that we can continue or even increase federally funded benefits while at the same time paying off our debt?
I'm assuming that your envisioned economic plan includes paying off the debt, because there's really little opportunity to save during the boom if any interest on savings is outpaced (or even rendered neutral) by the debt interest.
Let's assume we have another huge stimulus package. What should it be spent on, and why do you imagine that this time it will not simply be orgy politically beneficial pork?
Typically we see calls for government "investment" in infrastructure, education and so-called green energy.
The government (federal, state and local) already invests quite a lot in education:
The US already spend more per student than any other nation in the world, and 33% more than the #2 spender, the UK.
Here's what this spending has bought us:
We are #3 in the world in literacy rate, behind #1 France, and #2 Russia.
BTW, we spend 40% more per student than France and 319% more than Russia
In Math scores we come in 10th.
Finland and South Korea are #'s 1 and 2.
We spend 37% more per student than Finland and 106% more than South Korea.
We're better in Science scores though...we're 9th.
Finland, again, is #1, and Canada is #2
We spend 35% more than Canada per student.
So what can we expect to get from even more spending on education?
Satisfied Teachers Unions.
As for Green Energy, one need only review the ethanol debacle to see how government investment in this area works. And one only needs to look at Solyndra and its many clones to see how this Administration's investments in Green Energy work out.
Renewable resources account for about 9% of America's energy if you settle somewhere between the estimates of the skeptics and the zealots. And that's being generous. The only reason it approaches 9% is the degree to which it supplies electricity, and here, Nuclear Energy, that horrendous monster, accounts for 21%. Hydro overwhelms all other Green sources in providing 9%. It seems to me we had hydro-electric plants long before all the buzz about Global Warming.
Worldwide, it's about 2% to 4%.
Not exactly a dynamic market.
The development of Green Energy may or may not, ultimately be a huge boon to Mother Nature, and any industry that benefits so much from ideological and political attachments has to be put in the "growth" column, but any suggestion that it will even help (in a material way) our unemployment and economic problems is absurd.
"The Republicans want to let these Green Energy jobs go to China!" We hear the president and his followers declare.
Pretty much. Since they are jobs in a piddling industry that survives at all by virtue of government support, and lets the workers they hire go once they have collected and skimmed the money received from the feds.
We've let the jobs previously dedicate to the manufacture of doggie treats go to China, and pets are a far bigger driver of our economy than Green Energy.
Americans spend about $55 billion dollars on their pets every year. Frankly, I can't find any statistic on what consumers spend on Green Energy every year, but I guarantee that it is far less than what is spent on our pets.
According to the testimony of Administration witnesses before a congressional hearing, the $10 billion spent by the government in investing in Green Energy, resulted in less than 4,000 jobs in the construction phase and less than 400 jobs thereafter.
An absolutely smashing area for stimulus spending!
So, we are therefore left with infrastructure investment.
You know, those shovel ready jobs that were so abundant when the law was passed.
Hurricane Sandy provided us with an opportunity to see just how useless the first Obama stimulus package was.
Imagine, if the almost $1 trillion was spent on burying all of the power lines in the NE before Sandy hit.
Of course there was never any possibility that all of the stimulus dollars would be spent on a single project, no matter how crucial it may have been.
And let's say it was, and the government got to shore up all of the sagging bridges to boot.
Good for the country? Absolutely.
Good for the economy? Not so much.
Beyond the temporary jobs created, how would these expenditures have helped the economy?
The occasional catastrophe of a hurricane or collapsed bridge gets; understandably, enormous media coverage, but they don't make a dent in the US economy. In fact, they tend to invigorate the local economies in which they occur due to re-building. (Think of the ecological benefit of wildfires)
This is not to say that the lives and comfort of our fellow citizens are to be ignored, but, frankly, let them pay for the prophylactics locally and not ask the entire population to bear a measure of the cost. There are certainly real benefits to infrastructure improvements, but on a macro-economic level? Not until the whole framework is threatening to disintegrate.
There is a reason the NE power companies have not spent the money to bury power lines, and it isn't because it doesn't cost them a ton of money when a hurricane hits. It's because hurricanes haven't been hitting the NE for a long time. When they become more regular and the repair costs mount up, then the NE power companies will act. Actually they will act by whining to the government that they need federal assistance. They shouldn't get it, but they will because they annually contribute to the campaigns of Chuck Schumer and his NE Democrat friends.
The bottom line is that there is absolutely no rational reason to believe that any additional government stimulus spending will be anything more than throwing good money after bad.
Maybe Keynesian economics can, in theory, work but not so in the real world where the personal interests of the political class that profess to be true believers, have absolutely no intention of following the rules.
Sort of like communism.
Lofty ideas that have zero chance of being properly applied in the real world always end up being malignant.
