What's with the US budget and recession stuff?

[Al B. Sure!]

I stopped paying attention to any economics talk from politicians around when Hillary Clinton proposed 'gas tax holidays'... it just made me hate democracy.

But a few minutes ago, someone on facebook put up a status of the usual Republican-bashing which included the question, "How do we make jobs without spending?". After my Econ 101-style response, he followed up, "What I did ask for was one example of when we've been able to cut our way out of a deficit and gain jobs without raising taxes?"

I tried to explain how a recession is the result of a decline in aggregate demand and that both spending cuts and raising taxes are two things you don't want to do to get out of a recession. Right? Or is KH right and I didn't learn **** in Econ?

So I'm all like is this what the political debate is about now?

It's so hard to google and find legitimate positions through all the political spin so I'm not sure but are Democrats really saying we should increase taxes and cut spending slightly while Republicans are all cut taxes and cut spending dramatically? This is because of concern with the budget, economic recovery be damned, right? Or are politicians saying doing such things would assist the recovery?

[giblets]

Is this what your college degree got you? A job as a bank teller and the knowledge that cutting spending or raising taxes will reduce aggregate demand?

[Egbert]

I went to University and learnt that if you spend less that means you don't spend as much.

University education

[SlowwHand]

Learnt?

And while unemployment figures are at something like 9%, unemployment figures are bull****. Only those actively collecting unemployment compensation are included in the statistic.
Those that aren't eligible, or benefits have run out or the under employed aren't accounted for in any reports. I would guess the actual figure is close to 20%.

[Docfeelgood]

Learnt?

And while unemployment figures are at something like 9%, unemployment figures are bull****. Only those actively collecting unemployment compensation are included in the statistic.
Those that aren't eligible, or benefits have run out or the under employed aren't accounted for in any reports. I would guess the actual figure is close to 20%.

concur

[Aeson]

Right? Or is KH right and I didn't learn **** in Econ?

"or" does not compute

[Aeson]

As for the budget I hope they never sign one. Since we stopped passing budgets my income is up by roughly 300% even though I don't actually work.

OBAMA '12

[DaShi]

If you're just trying to increase consumer demand, then raising taxes on the rich won't negatively affect it. In fact, you could use that money to create the jobs that the private industry won't. Unfortunately, most government jobs waste human resources, but as a short term boost to hasten the end of recession, it's not a bad idea.

[RoboCon]

As Dashi proposes, offering to chuck Obamacare in exchange for significant military cuts would make evangelical Christians look good to the middle, and I don't see how it could be a loss for Nader given the lack of confidence in Obamacare by virtually everyone. It would be like trading 9-11 for Obama and a 2nd round pick.

[DaShi]

Get out of my head!

[MichaeltheGreat]

So I'm all like is this what the political debate is about now?

The political debate is essentially two things:
1) Meaningless talking points to pander to whatever portion of the two-digit IQ half of the electorate constitutes your base. These talking points should be vague and incomprehensible, or else based on a slogan with no real underlying meaning - that way your base will nod their heads and cheer because they want to pretend they understand.

2) Comments to the effect that your ideological opponents are the anti-Christ's personal minion, they like to sodomize goats and boil small children and little old ladies for lunch.

This system works well for both parties and all their little internal factions, because (a) the politicians and their staffers don't know **** about what they're supposedly doing, but thankfully, the base knows even less, and (b) since what they say makes no sense and will never be enacted in a form they will admit to, they can duck any responsibility for any consequences of whatever policies are enacted.

[Dinner]

Ideas which could help create jobs which might actually make it through Congress:

1) Allow employers to keep the unemployment payments of each new hire so that it only costs them $20,000 to hire someone for $40,000. It costs the government the same $2000 a month they would have paid in unemployment but this might encourage companies to hire a few people.

2) Pay roll tax reduction for the next year. This would give normal people more money which they will no doubt spend.

3) Allow companies to not pay fees or taxes or matching payments (such as SSI) for new hires so that the cost of new hires isn't so high for companies; this might encourage them to hire people. (Kind of the same as #2 but on the employer side.)

Would help but won't make it through Congress:

4) A real transportation bill which widens freeways, builds new airports & train stations (seriously LAX is 1950's garbage which NYC Penn station is a rat hole; replace them and all the other old ones in the country), and all the thousands of repairs (bridges, freeways, etc...) needed across the country. This would create millions of jobs spread out over every state.

5) Local governments could allow people to write off remodeling or home maintenance costs so that property taxes are reduced on a $1 to $1 basis. This would get people doing a whole lot of home improvement work which would create jobs and increase the net worth of homes but it can't work without some sort of Fed subsidy.

6) A new CCC which directly employs people to improve farm land, improve public lands, build dams, build aqueducts, build reservoirs, builds public parks, etc... While we're at it hire artists to create public art to beautify our cities and photographers to catalog daily American life. Result tons of jobs and general improvements for a better quality of life for all Americans.

7) Upgrade and improve every school in the country creating millions more jobs. While we're at it change the laws so that unemployed people can go back to school thus upgrading their skills and making them more employable in the future.

The hard truth is the US doesn't have a debt crisis right now and people are begging the US to issue more debt for them to buy. Right now the yearly borrowing cost for borrowing $1 trillion is ~$20 billion, which is the lowest rate since Eisenhower was president in the 1950's, so rather then listening to Republicans who are deliberately trying to crash the economy we should be spending big fixing everything which needs fixing here in America. After all the cost of keeping all of those people unemployed is much higher then the borrowing costs to actually put them back to work rebuilding America (it costs about $20 billion to spend a trillion employing people while unemployment is costing about half a trillion a year lately). We're going to spend the money either way so why not do something which actually helps the economy and improves the country long term (by building all that infrastructure).

[SlowwHand]

The political debate is essentially two things:
1) Meaningless talking points to pander to whatever portion of the two-digit IQ half of the electorate constitutes your base. These talking points should be vague and incomprehensible, or else based on a slogan with no real underlying meaning - that way your base will nod their heads and cheer because they want to pretend they understand.

2) Comments to the effect that your ideological opponents are the anti-Christ's personal minion, they like to sodomize goats and boil small children and little old ladies for lunch.

This system works well for both parties and all their little internal factions, because (a) the politicians and their staffers don't know **** about what they're supposedly doing, but thankfully, the base knows even less, and (b) since what they say makes no sense and will never be enacted in a form they will admit to, they can duck any responsibility for any consequences of whatever policies are enacted.

Holy crap! It's him!

[MichaeltheGreat]

Holy crap! It's Him!

Capitalization corrected.

I've been working for a bunch of Canuckistanis who couldn't collectively find their asses with both hands if you cuffed 'em and sat 'em down in back of a state trooper's car. Things have slowed down a bunch (like to zero) while they sort out if they want to sell out, take over and tank the project themselves, or just inject unqualified people to question what was done about issues that were resolved a year ago.

How've you been, Tex? Added to your roadkill collection lately?

[Kuciwalker]

I stopped paying attention to any economics talk from politicians around when Hillary Clinton proposed 'gas tax holidays'... it just made me hate democracy.

But a few minutes ago, someone on facebook put up a status of the usual Republican-bashing which included the question, "How do we make jobs without spending?". After my Econ 101-style response, he followed up, "What I did ask for was one example of when we've been able to cut our way out of a deficit and gain jobs without raising taxes?"

I tried to explain how a recession is the result of a decline in aggregate demand and that both spending cuts and raising taxes are two things you don't want to do to get out of a recession. Right? Or is KH right and I didn't learn **** in Econ?

That's sort of correct. If the central bank is doing its job the fiscal authority should be pretty free to adjust spending and taxes without threatening the recovery because the CB can offset whatever effect it has on AD. If you live in the real world it's not really clear, but any action by the fiscal authority will be muffled to some degree by the CB response.