Where is the US economy headed?

I see. If that's the best reason The New Republic can give us for optimism, I'm afraid there's not much reason for optimism. Extrapolation of current output trends is not a good argument when you know that input trends are going to reverse.

I see. If that's the best reason The New Republic can give us for optimism, I'm afraid there's not much reason for optimism. Extrapolation of current output trends is not a good argument when you know that input trends are going to reverse.

You don't seem to realize that the system we live in has quite a few Socialist elements to begin with. They seem to work pretty well. Why are you expecting people to have a negative opinion of stuff like Firefighters - a socialized defense system for our citizens? Or Medicare, a single-payer, socialized medical system that pretty much ALL our seniors use?

http://www.archives.gov/exhibits/charters/constitution_amendments_11-27.html
Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Almost all firefighters have not been established as such by the federal government. Almost all have been established by state and local governments.

But I thought the argument against the stimulus package was much of it didn't go into effect for months or even over a year.

Input trends are going to reverse? That's a little dramatic, don't you think?

Cycloptichorn wrote:

Input trends are going to reverse? That's a little dramatic, don't you think?

No, I don't think so. Right now, the stimulus package is the only thing that keeps the economy from falling off a cliff. We know it's going to peter out over the course of 2010. We know that the Democrats don't have 60 votes in the Senate to pass another stimulus package. On the other hand, we have no evidence that anything good will happen to consumer spending, business investment, or net exports -- the other sources of spending on US goods. And we certainly have no evidence that Senate Democrats will muster the guts to abolish the filibuster, although they do have enough votes to do that.

It's not me who's being dramatic. It's the year 2010 that will be -- at least towards the end.

Much of the stim money yet to be spent is directly supporting jobs - that is, construction projects.

Cycloptichorn wrote:

Much of the stim money yet to be spent is directly supporting jobs - that is, construction projects.

Yes, but so was the stimulus money that's already been spent. The change in unemployment between now and November will reflect the change of support between now and then. That support is declining, so the rational expectation right now is unemployment will be higher in November 2010 than in January 2010.

Add it to our list of bets if you want. There's a lovely Thai restaurant I'd like to revisit. I think it's on Shattuck Avenue and Berkeley Way. It's quite affordable too, so I'm not going to ruin you with all those bets I'm going to win.

Since the Republicans are not going to vote for new rounds of stimulus as long as Obama is in office, that's basically a bet about whether the Democrats will nuke the 60-votes limit in the Senate. I'm pretty sure they won't, but not quite sure enough to bet on it. So let's say that the bet is off if Obama gets another round of stimulus, and if that round is at least half as big as the package he got last year.

Suits me. The $80 billion job bill is cosmetics. Last year's $800 billion bill was surgery. And in 2010, the job market will still need surgery.

Republicans will have a hard time opposing it in an election year where unemployment is the top concern.

The $80 stimulus bill of 2010 is better than nothing. But it's worse than the $800 stimulus bill of 2009, which got us where we are now. That's why I'm expecting job losses for 2010.

I think the only way you can win this is through discouraged workers -- people getting so frustrated with the labor market that they give up looking for a job. But as I understand you, you'd be just as happy to bet on increasing employment rather than decreasing unemployment. If so, would you mind plugging this hole by making the bet about employment rather than unemployment? I suggest we use the employment-to-population, as our yardstick. I say it will be lower in November 2010 than in January 2010, unless there's a stimulus package comparable to that of 2009 -- at least $400 billion, say.