It's Official: The Stimulus Didn't Help

[Pliny]

Well, one is certainly welcome to negotiate better terms or medium of exchange, but goats or chickens can be a bigger problem.

Yes. True. Unacceptable terms are always met with violence.

[Pliny]

Can you guys do me a favour...

Let's just say the American dollar collapses and the world economy collapses and millions suffer as a result, can you please just start to question the necessity of a monetary based economy.

What is your idea of a monetary based society? I have the idea that you think a barter based economy is super. Money is a facilitator of trade and evolved from a barter system.

[Pliny]

That's not how it works...a weak dollar policy has the effect of shrinking the debt; it is purposeful currency manipulation.

This is true. How long will purposeful currency manipulation be tolerated?

[bush_cheney2004]

This is true. How long will purposeful currency manipulation be tolerated?

A very long time. When I was a child, 25 cents would buy a comic book, a can of soda, and a Hershey bar.

[sharkman]

I wasn't aware of this, but Obama is trying to ram an additional stimulus package through the senate. Originally 200 billion, they've cut it down to 105 billion in an attempt to get enough votes. I've got 3 points on this:

1) More proof that the stimulus didn't work. Why the hell does he think another 100 billion will work. Answer: he doesn't, but it'll keep things in check until after the mid-terms. He's willing to spend 100 billion on an election.

2) I hope I'm wrong, but this must mean they are running out of the 780 billion stimulus money in 1 1/2 years!

3) Obama hasn't learned anything. The economy must find its own equilibrium, you can't keep it artificially high indefinitely.

No link, sorry, this info is in this mornings Globe and Mail.

[msj]

I'm really tired of people saying the stimulus "didn't work."

Was it ineffective? Certainly.

But what do you expect when politicians do stupid things like tax breaks and home tax credits (i.e. stimulate demand in a sector that already has huge excess inventory).

If it were not for the stimulus the past 12 months would have been even worse for the typical American. The stimulus probably raised GDP by at least ~1.7% and increased employment by 1.2+ million by Q1 of 2010.

Without stimulus being implemented again, some are calling for a 1937 scenario whereby the US was coming out of the depression only to go back into it thanks to fighting the deficits that brought them out of the depression in the first place.

With most of the world implementing "austerity" programs it is easy to make the comparison.

History never repeats but it often rhymes.

[sharkman]

Yes, I've read that some feel the US has come out of the recession but they could fall back into it. I don't think the US has come out of the recession. Taking a hard look at the private sector tells you that. This means the stimulus was ineffective. Doing more of the exact same, with another 100 billion, will not change that.

I've lost track perhaps, but I thought the 780 billion was to be spend over 3 years, and they have run out of money in under 2. It's worse than I thought.

[maple_leafs182]

What is your idea of a monetary based society? I have the idea that you think a barter based economy is super. Money is a facilitator of trade and evolved from a barter system.

I don't think a barter based economy is super.

I know money evolved from the barter system, I think it is time to evolve passed money.

A monetary based economy creates too many social and environmental problems.

[sharkman]

I wasn't aware of this, but Obama is trying to ram an additional stimulus package through the senate. Originally 200 billion, they've cut it down to 105 billion in an attempt to get enough votes. I've got 3 points on this:

1) More proof that the stimulus didn't work. Why the hell does he think another 100 billion will work. Answer: he doesn't, but it'll keep things in check until after the mid-terms. He's willing to spend 100 billion on an election.

2) I hope I'm wrong, but this must mean they are running out of the 780 billion stimulus money in 1 1/2 years!

3) Obama hasn't learned anything. The economy must find its own equilibrium, you can't keep it artificially high indefinitely.

No link, sorry, this info is in this mornings Globe and Mail.

Doesn't anyone else find it odd that if the stimulus was so successful Obama is trying to scrounge up another 105 billion?

[msj]

Doesn't anyone else find it odd that if the stimulus was so successful Obama is trying to scrounge up another 105 billion?

Because the first one wasn't big enough?

You know, like Paul Krugman said it was from the outset....

[Pliny]

I don't think a barter based economy is super.

I know money evolved from the barter system, I think it is time to evolve passed money.

We have. There is no money in circulation today whatsoever. We use tokens.

A monetary based economy creates too many social and environmental problems.

Do you mean a "token" based economy? Where is there a monetary based economy?

[Pliny]

Doesn't anyone else find it odd that if the stimulus was so successful Obama is trying to scrounge up another 105 billion?

According to Joe, the VP, the stimulus was successful. So more of the same will mean even greater success.

WE have to define success though.

The original stimulus did nothing more than prop things up and provide an opportunity for government to take the reigns of some corporate enterprises and admonish some so it appeared like it was looking after things for America.

You can't prop up losing enterprises and have them continue to operate in the same fashion without failing in the future.

The question is how long can you keep stimulating the economy before your creditors put on the brakes and decide they don't want to create more debt.

The creditors are of course the taxpayer and they are getting a bit concerned about, not their own debt, but generational debt.

[Pliny]

Yes, I've read that some feel the US has come out of the recession but they could fall back into it. I don't think the US has come out of the recession. Taking a hard look at the private sector tells you that. This means the stimulus was ineffective. Doing more of the exact same, with another 100 billion, will not change that.

I've lost track perhaps, but I thought the 780 billion was to be spend over 3 years, and they have run out of money in under 2. It's worse than I thought.

They haven't really spent all of the original stimulus yet which makes one wonder why there is a necessity for yet another 100 billion. But, I believe you are right, they haven't come out of the recession.

[Pliny]

Because the first one wasn't big enough?

You know, like Paul Krugman said it was from the outset....

Hyuk, hyuk, hyuk....Paul Krugman...hyuk, hyuk...she said Paul Krugman....tee hee hee. Him and Barack are both Nobel prize winners. I wonder if Paul felt the value of his award sullied when he heard Obama was getting one?

Unfortunately, it is obvious Krugman is not alone and advisers to the President are suggesting that route as plausible. I know Ben Bernanke is behind it all the way. He said so himself that the reason the Great Depression continued was governments didn't pump enough stimulus into the economy.

Their big mistake is they are trying to control the economy. Thinking that their methods and tools are enough to keep things well oiled. But they haven't looked at the machine for decades and seen that it is very dilapidated. They can keep oiling it all they want wherever the squeaks appear but what is really necessary is that parts need replacement. Drowning them in more oil will eventually no longer work.

That means more unemployment is on the horizon and there are two courses of action for government - a fascist takeover of the economy or allow itself time to clean out the deadwood and have government stay on the sidelines as it does so.

[Shady]

By Obama's own standard the stimulus was a failure. It was suppose to keep unemployment from going above 8%. It's 10%.

As for the argument that things would have been worse without it. It's not an either or situation. It's not a no stimulus versus Obama's stimulus choice as Obamabots will have you believe. A well designed stimulus would have been much more effective.

Anways, Obama's telling the G20 not to stop their own government spending on stimulus. Fortunately, other leaders know better, and are basically telling him to sit down and shut up!

Chancellor Angela Merkel championed German export strength as “the right thing” for her country, spurning President Barack Obama’s call to boost private spending as both leaders prepare for Group of 20 talks.

Merkel, addressing a business audience in Berlin today, said she told Obama in a phone call that cutting government debt is “absolutely important for us,” exposing a second point of contention ahead of the June 26-27 G-20 summit in Canada.

Reducing the budget deficit by 10 billion euros ($12 billion) per year “won’t put a brake on the world’s economic growth,” Merkel said, relating what she told Obama yesterday. Germans are more likely to spend money if they feel the government “is taking precautions” to ensure solid finances, she said

AP

[Pliny]

Anways, Obama's telling the G20 not to stop their own government spending on stimulus. Fortunately, other leaders know better, and are basically telling him to sit down and shut up!

Merkel sounds more economically savvy than Obama. They both want to boost private spending and for Obama more money in the economy is the answer. Merkel wishes to cut the government budget - how novel?

[maple_leafs182]

We have. There is no money in circulation today whatsoever. We use tokens.

Do you mean a "token" based economy? Where is there a monetary based economy?

Whatever, it is still based on the concept of free trade.

Free trade may have worked well in the passed and I admit it does work to some extent now but now it has become far too destructive. We fight wars over it, environmentally we are destroying the planet because of it.

Politics won't solve the problems we face today, we need to change the way we operate as a whole.

[Pliny]

Whatever, it is still based on the concept of free trade.

Free trade may have worked well in the passed and I admit it does work to some extent now but now it has become far too destructive. We fight wars over it, environmentally we are destroying the planet because of it.

It isn't based on the concept of free trade.

The truth is expressed in the statement that if trade is restricted war is the result. Ludwig Von Mises says that: "“The philosophy of protectionism is a philosophy of war.”

Politics won't solve the problems we face today, we need to change the way we operate as a whole.

Are you an anarchist? We do need to remove the fraudulent and criminal element form society and that is government's role. The problems we face today must be faced by us, society, we, the people. It is much easier without a criminal element working for selfish or destructive purposes against us.

[maple_leafs182]

It isn't based on the concept of free trade.

The truth is expressed in the statement that if trade is restricted war is the result. Ludwig Von Mises says that: "“The philosophy of protectionism is a philosophy of war.”

I'm not saying Canada should only trade with Canada.

I'm saying we need to start working together, instead of us all having our own bank accounts there should be one bank account we all use.

I'm saying the resources of this planet don't belong to BP or Exon Mobil, they belongs to all of us.

Are you an anarchist? We do need to remove the fraudulent and criminal element form society and that is government's role. The problems we face today must be faced by us, society, we, the people. It is much easier without a criminal element working for selfish or destructive purposes against us.

I'm not a complete anarchist, I do believe there is some role for government.

Laws don't remove the criminal element from society, if you haven't noticed we've had laws and government for a long time yet criminals still flourish.

We have to look at what motivates criminals to become criminals in the first place.

[sharkman]

So with a faltering economy that just saw 650,000 citizens quit the job search, and an inept president who has no idea how free enterprise works, will there be another Black Monday this fall? The signs are growing and experts are again warning of a depression. Actually, we could already be in one as this is roughly how the last one went.

[dre]

This is true. How long will purposeful currency manipulation be tolerated?

It will go on as long as theres a market for US government backed treasury instruments... bonds, and bills. As long as the US can sell bonds, it will be able to keep inflation somewhat predictable and keep defecit financing.

Right now that market is relatively contrived... Countries with a large trade surplus with the US are essentially bailing the US out for the same reason the US bailed out major companies. They see the US as "too big to fail", and they know that if the US crashes right now it will bring them down as well. The asian and pacific rim nations buying up US debt are doing so for a very good reason... if the US dollar sees a large scale devaluation then American consumers wont be able to buy products imported from these countries. In other words, they arent buying these bonds because they think theyre a solid investment. Theyre buying them specifically to keep the US dollar strong enough so that can keep hawking the junk they make to US consumers.

This definately cant go on forever, and once consumer markets in other countries have grown to a certain point there will be a flight away from the greenback and it will see real catastrophic devaluation, but thats still a decade or two away in my opinion.

[maple_leafs182]

This definately cant go on forever, and once consumer markets in other countries have grown to a certain point there will be a flight away from the greenback and it will see real catastrophic devaluation, but thats still a decade or two away in my opinion.

It will happen sooner then that.

I'm thinking within a year or two.

Unless the U.S. goes to war with Iran, then maybe a little longer.

[dre]

BTW...

Despite the claims made in the OP, we will never know the degree to which the stimulus worked or didnt. Any ideological claims along the lines of "stimulus doesnt work", or "stimulus always works" are horseshit.

[sharkman]

It will happen sooner then that.

I'm thinking within a year or two.

Unless the U.S. goes to war with Iran, then maybe a little longer.

Yeah, much sooner. Obama had a tough row to hoe no doubt, but his disaster of a stimulus bill completely ignored basic laws of economics and didn't help one bit, it only put off what would have happened. I bet my bippy that by the end of September the stock market will be below 7500 as all hidden strategies to keep it propped up fail.

[dre]

Yeah, much sooner. Obama had a tough row to hoe no doubt, but his disaster of a stimulus bill completely ignored basic laws of economics and didn't help one bit, it only put off what would have happened. I bet my bippy that by the end of September the stock market will be below 7500 as all hidden strategies to keep it propped up fail.

First of all you dont even have the faintest idea of whether it worked or not.

And second... The nations buying up US debt and bailing our America are not going to stop in the next couple of years. Theres no reason for them to abandon the greenback while they still have large trade surpluses with the US.