U.S. economy grows at 4.8% Q-Q annualized rate

[Spiffor]

faut songer à jouer de la guitare. dans la rue.

I don't think it can raise any funds for the communist party, ergo it is useless

[Lawrence of Arabia]

nah, but you can put the word out onto the street with your own version of the internationale.

[MRT144]

Originally posted by Kidicious


Why? Other costs go up, and we see little inflation from that.

http://en.wikipedia.org/wiki/Built-in_inflation

[MRT144]

this is why i said, the only reason to give a raise to a worker is to keep his skills with your company or to improve the productivity or reward it somehow. not because the price of goods goes up.

[Kidlicious]

Originally posted by Zkribbler
Deficit spending is a way of jump starting a stagnant economy...the same a borrowing is a way of financing a college degree or a new business.

The trick is that the deficit spending, the college degree or the new business must provide an economic return great enough to: (a) pay off the original borrowing; (b) pay off the interest; and (c) provide additional revenues. If not, it's a counter-productive (i.e. BAD) investment.

And it's economic suicide to finance normal day-to-day expenses via borrowing.

Deficit spending can only increase spending and employment. You can't pay off the original borrowing, or interest with it. It can create economic recovery, but deficits don't increase spending unless they are new deficits or they are increased deficits.

[Kidlicious]

Originally posted by MRT144
this is why i said, the only reason to give a raise to a worker is to keep his skills with your company or to improve the productivity or reward it somehow. not because the price of goods goes up.

I'm sure that's the way people decide raises, but my point is that wages can increase without causing inflation at this time. Why not? Fuel and interest costs are increasing, and we don't see any inflation from that.

[Zkribbler]

Originally posted by Kidicious
Deficit spending can only increase spending and employment. You can't pay off the original borrowing, or interest with it.

Spending --> increased sales tax revenues
Employment -> increased income tax revenues

Plus, let's say deficit spending were used to construct a roadway or bridge which in turned increased commerce. The resulting surge in the economy would also result in increased tax revenues.

A school built with deficit-spending funds would result in a more educated citizenry, who would hold down better jobs, get more pay, and as a result, pay more taxes.

[MRT144]

Originally posted by Kidicious


I'm sure that's the way people decide raises, but my point is that wages can increase without causing inflation at this time. Why not? Fuel and interest costs are increasing, and we don't see any inflation from that.

just because we dont see high inflation now doesnt mean its not going to happen

[Zkribbler]

Originally posted by MRT144
just because we dont see high inflation now doesnt mean its not going to happen

Agreed. These rapidly increasing gasoline prices are soon going to have to be figured into the prices of all goods that are shipped. That almost certainly means inflation.

[Kidlicious]

Originally posted by Zkribbler
Spending --> increased sales tax revenues
Employment -> increased income tax revenues

It's like bouncing a ball. The ball comes back, but never with the same velocity. You get tax revenue from the increased spending but never as much as you lose from the tax cut. You get economic recovery, but you have the nasty side effect of the deficit. When the economy gets back on track you have to raise taxes if you want to balance the budget.

And paying of the debt doesn't really ever make sense.

Plus, let's say deficit spending were used to construct a roadway or bridge which in turned increased commerce. The resulting surge in the economy would also result in increased tax revenues.

A school built with deficit-spending funds would result in a more educated citizenry, who would hold down better jobs, get more pay, and as a result, pay more taxes.

You're better off just raising taxes than borrowing, unless rates are very low. If you do borrow you have to wait for a lot of economic growth for the budget to balance itself again. The growth from the project doesn't create that growth. The growth has to come from elsewhere.

[TCO]

I still have Kidi on ignore. Is he being as stupid as usual?

[Zkribbler]

Not really. He's quite intelligent really.

I've taken the position that deficit spending rarely makes economic sense.
He's arguing that it never makes economic sense.

Does anyone want to argue that defict spending always or usually makes economic sense?

[MRT144]

when pigs fly out of my ass

[Zkribbler]

That sounds very painful....

What would they have been doing up there in the first place?

[MRT144]

i eat pigs live and whole