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Another good article, equally contentious.

by Ziks511 / September 6, 2013 7:20 AM PDT

"Set aside the politics for a moment, and ask what the past five years would have looked like if the U.S. government had actually been able and willing to do what textbook macroeconomics says it should have done — namely, make a big enough push for job creation to offset the effects of the financial crunch and the housing bust, postponing fiscal austerity and tax increases until the private sector was ready to take up the slack. I've done a back-of-the-envelope calculation of what such a program would have entailed: It would have been about three times as big as the stimulus we actually got, and would have been much more focused on spending rather than tax cuts.

"Would such a policy have worked? All the evidence of the past five years says yes. The Obama stimulus, inadequate as it was, stopped the economy's plunge in 2009. Europe's experiment in anti-stimulus — the harsh spending cuts imposed on debtor nations — didn't produce the promised surge in private-sector confidence. Instead, it produced severe economic contraction, just as textbook economics predicted. Government spending on job creation would, indeed, have created jobs. "

But of course Obama didn't get the money he wanted because Bush before him had tossed money at Wall Street without restrictions ("No bonuses this year boys", would have made sense, in fact "No bonuses for the next 5 years", would have made more) and because the Republicans were so shocked at his reversing their policies they decided to take the ball and go home.
Super-majority my a$$, what a foul and undemocratic hijacking of the process that was. You lost, let those elected govern and Shut TFU. Bush had the gall to enact legislation with his tame congress in 2001 and pass a tax cut which handcuffed his successor, that too is an unwarranted interference in the democratic process. If people vote for change as they clearly did in 2008, then that change should be permitted. Particularly since circumstances and the economy had changed so dramatically.

"But wouldn't the kind of spending program I'm suggesting have meant more
debt? Yes — according to my rough calculation, at this point federal
debt held by the public would have been about $1 trillion more than it
actually is. But alarmist warnings about the dangers of modestly higher
debt have proved false. Meanwhile, the economy would also have been
stronger, so that the ratio of debt to G.D.P. — the usual measure of a
country's fiscal position — would have been only a few points higher.
Does anyone seriously think that this difference would have provoked a
fiscal crisis?"

The key word there is "seriously", as in without partisan presuppositions. It could in this case also be synonymous with "honestly" because the opposition that Obama faced was as dishonest as I've ever seen in the US. It was crude and facile and was dedicated to maintaining the delusional falsehood that lower taxes makes more jobs. The fat cats have sat on their big resources and refused to invest.

Throughout the Bush Administration, which preached fiscal restraint and practiced the incineration of the economy, nobody acted as if they cared about restraint. An issue which rather undercuts Conservative posturing on the issue of restraint.

Taxes as I will point out yet again, were far higher, in the 50's and the 60's and the 70's when the country was far better served by the availability of jobs, a narrower gap between rich and poor, and better social mobility. Mobility these days is all down hill.


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What tripe........
by TONI H / September 6, 2013 8:33 AM PDT

Your first paragraph says it all.......BO should have been immediately concentrating on allowing businesses to begin to create jobs again (which history has shown always happens immediately after a financial crisis), GM should have been allowed to file bankruptcy instead of having the Unions selectively bailed out TWICE (to which they still owe us about $35B yet brag about profits each year) but instead he spent two full years getting Obamacare rammed down our throats against the people's will and with bribes, threats, and false promises to his Dems to get the necessary votes (with Reid having to go the route of changing the voting rules at the last minute instead of having the required 60 votes). It's five years later and BO STILL has done NOTHING about the jobs situation and insists with Keynesian theories that have failed every single time in history that taxing more and more is the answer, all while spending everything he gets his greedy hands on and is entrenched in creating the most massive and intrusive government ever in the USA. He believes he is King.

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And now you blaming Bush
by James Denison / September 6, 2013 10:16 AM PDT

for what Obama has done? Or more so, what Obama has failed to do? I agree with the basic principles of the article, but surely don't with your misguided rant on what you THINK it means. I've said much the same as the author, which is that putting money into the temples of finance called banks only creates money hoarding and does little to nothing to expand an economy contracting from a Credit Collapse like we've seen. The people are the economy, not banks, they are only there to facilitate money transactions between the people, but what we see now are simply money transactions between the banks themselves, the large conglomerates borrowing the money at negligible interest rates, which such corporations then use to buy back stock at bargain prices from the people, and the govt borrowing for dead end socialist programs, while doing little to nothing to actually create jobs.

This has been the stupidest approach since the beginnings of the FDR administration and the failures he first experienced are the same we have and the possible future Greater Depression which will eventually result from it if policy is not changed and quickly. FDR didn't have any success till he figured out that giving lots of money to banks accomplished nothing more once deposits were secured and in a fit of anger over that failure finally realized it was jobs the nation needed, not banks fat with cash from the Federal Reserve and Treasury.

As noted, austerity is not the answer either. Instead the Biblical principle of wise use of money is what we need. This means the govt needs to expand the economy itself again, and since the people are the economy, that means getting money to the people, and getting something in exchange for that money, thereby creating jobs, not socialist poverty as exemplified by the past half century.

Where is a valid use of govt money? Hopefully not devoted to war activities and support of war materiel as used in the past. Instead use it for improving and creating better infrastructure across the nation, such as the economic boost provided during the Eisenhower administration with the creation of the interstate system. It provided both jobs and increased means of economic activity due to improved transport system and helped immensely in moving from the wartime economy to a peace dividend following. New bridges, new highways, repaired bridges, repaired highways, upgrade of large potable drinking water resources for dryer areas of country, support of irrigation, and so forth.

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Only blaming Bush for handcuffing his successor of whatever
by Ziks511 / September 8, 2013 5:00 AM PDT

Party. If the Republicans had won in 2008, they'd have had all the problems of the Bush economy and the Bush tax cuts. They wouldn't have had the opposition of the Republican party, and they'd probably have done more than Obama was permitted to do, and you'd all be singing hosannahs over how smart the Republicans are. But that's just how it looks to me.


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