Bush Job Creation Promises Failing to Deliver

[dainbramage20]

Consumers are getting to the point where they are strapped for cash. There just isnt much to spend when the 40% of the Country makes under a living wage. Soon this bubble will burst, very soon. Unless Workplaces actually begin dishing out more money for services worked by employee's, consumer spending will be an oxymoron.

[Sava]

Originally posted by mrmitchell

21000 high paying jobs? Or 21000 "Would you like fries with that"?

Hi, I work at WAL-mart...
[/southern drawl]

[Boris Godunov]

Would you mind changing this $1 million bill for me, young man?

[MrBaggins]

Originally posted by Boris Godunov
Would you mind changing this $1 million bill for me, young man?

I just inhaled coffee, and spit it over my keyboard.

[Sava]

Originally posted by MrBaggins




I just inhaled coffee, and spit it over my keyboard.

oh wait, I wonder if some of those 21,000 are burger manufacturing jobs!

[Boris Godunov]

Probably, and as MrBaggins reminds us, no doubt many are at recently-opened Starbucks.

[Vanguard]

You are forgetting that the numerator in this equation (output) is also reduced as you decrease the denominator (hours). Imports subtract from output.

Not at all. The reason American companies are doing this is because they can buy the goods cheaper in China, yet sell them for the same price as goods made here. So the same value is being "produced" here, but less work in hours is being done here.

In the long run, this is obviously an unstable phenomenon. It is only supported by large deficits, both bugetary and trade. Eventually it will have to end, with good consequences for some people and bad consequences for others. But whoever wins or loses, it is simply disingenuous to say:

"As you can see, we haven't had it this good for 40 years".

[Vanguard]

Whoopsie. Wrong button. Never mind.

[Ned]

Originally posted by Sava
I think that "demand-side" economics might be able to create jobs... i.e. empowering the consumer classes by providing things like low cost health care, better and lower cost education, and regulating industries that deregulation has damaged (telecommunications and energy). If consumers have more disposable income, they can spend more, thus fueling the economy and job growth. Even if that doesn't work, at least people will have health care and other costs alleviated. Progressive taxation

Sava, even if you are right about this, how does raising taxes enough to close the deficit, as advocated by the Democrats, thereby taking hundreds of billions out of the private economy to massively reduce disposible income going to help business to "expand" to meet this massively reduced demand so that they hire more Americans, particularly during a time of recession?

[Kidlicious]

Originally posted by el freako
Yes I do support pump-priming to a certain extent (but a 5% swing in the structural budget balance is huge by any standards),

I don't believe the deficit is large enough, however I don't think the stimulus is very effective either. I would have tranfered money to the states and done some other things. I certainly wouldn't have cut taxes for the rich as much.

Originally posted by el freako
but I also support the opposite of raising taxes when the economy has recovered (do you?) - this the bush administration shows no sign of doing (indeed they are trying to make the 'temporary' tax cuts permanent)

I believe in raising taxes when the economy is getting hot, not recovering. If you raise taxes during recovery you might send the economy back down.

Originally posted by el freako
Are you seriously claiming the the US economy is still in recession?

I call it a recession, but I realize that others don't. We have a problem because we built up so much capacity, and replaced so much machinery in the late 90s. We have an output gap. It will take a lot more stimulation to close that gap.

Originally posted by el freako
Barring an external shock the next recession is due in around 6 to 8 years time by my reckoning.

Why not bar external stimulus, or some other factor. The fact is we don't have any idea what will happen between now and then.

[Ned]

Kid, you and I are really on the same page on this issue, it seems. Let me give the folks here a little lesson on what causes great depressions, which is where we would were headed if we did not cut taxes in the last few years:

"Since 1776 there have been six periods of substantial budget surpluses and significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson's efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. Every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction. Further, every budget surplus has been followed, sooner or later, by renewed deficits. However, correlation—even where perfect—never proves causation. Is there any reason to suspect that government surpluses are harmful?

.... [a detail explanation]

"[H]istory suggests that over the longer run, deficits stimulate the economy and surpluses are harmful."

http://www.levy.org/1/docs/pn/99-3.html

[Vanguard]

Ned,

When you incur debts (like we are doing now), you must eventually either repay them or default on them.

Since you don't think that we should repay our debts (ever, apparently, if I read your post correctly), you must be in favor of eventual default. Is that correct?

[Ned]

Originally posted by Vanguard
Ned,

When you incur debts (like we are doing now), you must eventually either repay them or default on them.

Since you don't think that we should repay our debts (ever, apparently, if I read your post correctly), you must be in favor of eventual default. Is that correct?

Vanguard, the way it works is that treasury notes and bonds are redeemed with money financed by the issuance of new treasury notes and bonds.

Here is a little more from the article:

"The economy emerged from World War II in 1945 with a record debt-to-GDP ratio. Since the war we have had the longest depression-free period in the nation's history. We have, however, had nine recessions, each of which was preceded by a reduction of deficits relative to GDP (see Figure 1). The deficit fell rapidly toward the end of the Carter presidency, preceding the deepest recession since the Great Depression. In spite of President Reagan's pledge to balance the budget, he presided over the largest deficits we had seen since World War II. To some extent, the deficits grew because of the economic slowdown; however, tax cuts and spending increases (primarily for defense) caused a discretionary increase of the deficit. The "Reagan boom" lasted from November 1982 to July 1990, the longest expansion in the postwar period..."

http://www.levy.org/1/docs/pn/99-3.html

The article was written in 1999 just prior to knowledge that the wheels had come off. The charts in the article show us going into a surplus. The article suggest that we could have expected the greatest recession since the Carter recession based on history.

Well, we did nothing even though we should have been cutting taxes big time in 1999. We all paid the price of ignorance of our leaders.

[Kidlicious]

Originally posted by Vanguard
Ned,

When you incur debts (like we are doing now), you must eventually either repay them or default on them.

Since you don't think that we should repay our debts (ever, apparently, if I read your post correctly), you must be in favor of eventual default. Is that correct?

That's not the way it works for govts. They go on indefintely in debt.

[Vanguard]

Oh, I see. Government debt isn't like other debt. You never have to repay it.

Terrific. And, hey. Wait a minute! I've got a great idea! Why don't we get rid of taxes altogether and just borrow whatever money we need for the government?

That would be incredible. We could invest in education, infrastructure and homeland security, and never have to pay it back. And think of the boost that lowering taxes would give to the economy!

Any comment?