Honestly, it shows that if you put more money in the hands of the people that it WILL stimulate the economy and would greatly help us out of this recession.
The same basics would apply here as well. If you cut taxes and people get more of their own money they wil spend more money. Why do you keep insisting that the government is so much smarter than us and that they know better where to spend OUR money???
Oh, and the SCARIEST part of this whole thing.... Nancy Pelosi is already saying a SECOND SPENDULUS MIGHT BE IN ORDER!!!! Is this woman out of her F***ING mind???
Capitalism works better when you get a lot of people at the top thinking like Henry Ford, rather than Barnum & Bailey. If you cut taxes when consumer confidence is low, spending will not increase in like amounts. Therefore the economy will suffer. If you cut taxes when consumer confidence is high, that money will be spent, and the economy will do well.
If it simply comes down to money, how did he win in the first place? IIRC, he didn't have nearly the money that Hillary had, until he got support. So are we going to say he bought support with his money, or are we going to say he got money from his support?
Doesn't matter ....what matters is where are we headed? We can debate how or why he got elected till doomsday but thats looking back, lets look forward and where are we going and who really stears the presidential ship ...and does he have the ability to read the radar ....
Given our gross inability to predict the future, as evidenced the the performance of our investment portfolios, how is anyone here qualified to make projections in the infancy of a new presidency?
I'm thinking maybe you misunderstood my comment....I did not say anyone can predict anything about the man or his presidency...I said some close to and privy to his decisions (not you or I) are concerned with his ability to govern and lead and that he may just not be quite what he was advertised as in the election process...this is no crime as he won't be the first or last....it is what it is....I myself am concerned with the spending and lack of oversight / control with it and the things he seems to think will fix the economy. Some seem foolish, some seem good,none seem perfect but I don't think perfect exists. (On a side note my portfolio has done ok over the past 25 years for a coupla reasons,I did all my own extensive research, bought in companies I knew something about, did not buy into the "irrational exuberance" of the go go days, and took with a grain of salt and researched any investment advice myself if given to me by someone who stood to profit from said advice if all I had to do was buy and it didn't matter if the suggestion was profitable) Duty this has been an entertaining topic today as you have done an excellent job of playing Devils Advocate ...
I, too, am very concerned with the amount of our spending and the lack of oversight. It has been poorly managed from the very beginning (even before our new president even took office). These additional bills fit the mold of throwing "good money after bad" which has always been a poor strategy in the market.
As far as my portfolio, I've done poorly in my 401(k), but my investment choices with that money are very limited... I have been lucky to fare better than most with my allocations (like none of it in company stock). Still, there were no elections available outside of straight money market (which is where my pension currently sits) that would have afforded the opportunity to make money. My independent investments (in a Roth IRA) have pretty much broken even since we opened the accounts (in 1999)... so I'm definitely not doing great in that department, either. I actually have done a bit better since I turned the bulk of those investments over to an investment manager. I have other guaranteed investments that have a small return (4.5%), which are the staple of my long-term plan. Those conservative plays have turned into my shining star from an investment perspective. By the time I retire, I expect (and hope) that they won't be the bulk of my return, but for now they give me a little peace of mind.
I'm familiar with the limited choices from my banking days back in the 80's Duty, I can sympathize with your frustration on that point. Hopefully a time will come again when we are reading up on M&A's and dreaming of good returns and listning to David Faber and Michael Haynes tell about the next great company and their products and how many jobs are being created and personally I don't care if the President is a Republican or a Democrat when this happens. I can't imagine anyone would turn down prosperity because of political affiliations.
II can't imagine anyone would turn down prosperity because of political affiliations.
No, but I think an alarming number would fail to recognize it when they had it.
Sort of along the same line as "part of getting a good deal is recognizing it". I understand and even somewhat agree.
and ...
yes i have more than a lot of people in the US. that does not mean that i should give up what i worked hard to get so that people who are not as well off as me can make money off of my work. IT comes down to creation of wealth and the evolution of money. that is what i want to talk about when i have more time.
yes i have more than a lot of people in the US. that does not mean that i should give up what i worked hard to get so that people who are not as well off as me can make money off of my work.
That's where you are failing to understand macro-economic principles. If you love your money, you must set it free. It is in this freedom that it will grow and come back to you greater than it ever was before.
Of course, if you choose to do this in faith that others will do the same, they will not reciprocate. That is where taxation comes in, and that is the lifeblood of a well-oiled economic machine. Not that you will ever recognize that. If our economy becomes stronger than ever under this new president, you will not see it because you won't permit yourself to see it, and you will have already convinced yourself that you would be better off under a different economic policy. This is why this discussion will never achieve its end. Its complexity in theory far exceeds what it would take to understand fundamental (and sound) business practices, which is where conservative policy-makers have failed to progress in their thinking. It is also the reason that a successful businessman would make a great politician at the local level, and a terrible one at the national level.
what you are failing to see is that if i have more money to set free i am more willing to do so. macro and mico are connected. they arent different ways of thinking. and this we should learn from japans mistakes.
saving will help this situation. putting money in the bank will help this situation. paying off debt will help our situation. How? the banks will have more money to pay off debt.
we are both talking about injecting money into the system. the only problem is, your way creates no new wealth, where my way does. you cannot create wealth by taking it from others and redistributing it. its never happened before. your just moving around wealth that is already there. there are no new wealth creating projects in building roads. noboby makes a wealth off of the road itself. not even the government. a few people get paid in the process, but they are temporary jobs.
i have a right as a US citizen to spend or not spend my money as i feel fit. the government should not be aloud to arrogantly come in and steal what i earned because they feel that i am not spending it the way they want. When the government takes over the wealth creation system via taxation we have a problem. THAT IS WHAT SOCIALISM IS. and socialism fails every time it is tried. that is what YOU fail to see.
and if this country sinks deeper aand deeper into depression you will fail to see as well. you will only say there is not enough regulation. you are so set in your ways you will never want to see it another way even though the capitalist system has made the US one of the greatest and wealthiest nations in the history of the world.
Good point.. we should stop building stupid roads and bridges.. nothing but a huge waste of money. We should get rid of these damned roads. And those lousy money-pocketing non-spending road construction worker types need to take their filthy hands off our pretty money so we can all sit around and look at it and imagine how valuable it would be if everybody else would circulate their money really fast while we sit on ours and play with it. Good plan.
Putting money in the hands of people that spend it rapidly is the best way to heal a struggling economy. Keeping money in the pockets of those who like to sit around and look at it is the best way to create what we've got.
Explain to me again how our system of roads does nothing to further our economy?
Good point.. we should stop building stupid roads and bridges.. nothing but a huge waste of money. We should get rid of these damned roads. And those lousy money-pocketing non-spending road construction worker types need to take their filthy hands off our pretty money so we can all sit around and look at it and imagine how valuable it would be if everybody else would circulate their money really fast while we sit on ours and play with it. Good plan.
this is exactly what i want to talk about tomorrow. but my wife wants me in bed. I dont think I should turn her down.
dutyje:
Putting money in the hands of people that spend it rapidly is the best way to heal a struggling economy. Keeping money in the pockets of those who like to sit around and look at it is the best way to create what we've got.
yes, and i am saying that we dont first have to take the money out of other hands first. just lower taxes. that will put money in everyones hands faster. they can then spend and save as they see fit. the government shouldnt tell me, or anyone, how to spend the money they worked for. that concept is socialist. dont say it isnt. that is how the socialist system works. tax more. let the government dole out as it sees fit. that is bullshit. the people that produce wealth and play by the rules and make good decisions should reap the rewards of their labors, not be forced to give up higher and higher percentages of their wages so that those who cant/wont will have a few extra bucks.
You're probably right... you understand the economy way more than the mass of professional economists who disagree with you (not to be confused with market analysts... that's micro-econ.. focus.. focus...)
I hate to see the road/bridges argument for one reason ...even if we were in the middle of a boom time economy, right now our roads and bridges really do suck, I get to witness it every workday of my life and believe me some of it is pitiful. I may not whole heartedly agree with the why but I do hope to reap the rewards of the finished product, less tire wear,front end alignments and paint chips plus the wear and tear on my back and i'm not exactly an old timer either...JMHO ...
Explain to me again how our system of roads does nothing to further our economy?
damnit... here goes
the evolution of money
i own a horse farm. down the road bob owns an apple farm. one day bob comes up the road to see me and says, "hey kuzi, i need a horse so that i can make my farm work better" "ok" i say "but i need something in return. what you have that i can have in return?" we strike a deal that i will accept 10 bushels of apples in exchange for one horse.
this goes on for a while. sometimes bob initiates the trade, sometimes I do. One day i go up the road to see bob and say, "hey man, can i get some apples and ill give you a horse?" bob looks at me and says " well, i already have enough horses. how about i give you the apples and you give me an IOU for a horse later?" i agree. we now have a bit of paper that is worth one horse. if someone else comes along and asks bob for a horse bob can give this new guy the IOU in exchange for whatever good that guy is producing. that guy then has a bit of paper worth one horse. the government then comes along and takes one of every five horses i have and one of every five bushels of apples that bob has. this is an increase from the 1 in 10 they were already taking they say they are gunna use these items to repair the road. the road gets repaired and bob and i both have the same deal, however we just have 10% less stuff to make a deal with. did the road help us? yes. was it the road repairs themselves that created wealth? no.
the apples and the horses that were consumed during the production of the road are now gone. not only did the government works problem not create wealth, it destroyed some. No new wealth was ever put into the system. it was taken from the people producing it, and consumed. the government didnt make money off of it, and the people were taxed more. the people cant sell the road. they cant buy it. they can use it. the road doesnt create the wealth, the people do.
You're probably right... you understand the economy way more than the mass of professional economists who disagree with you (not to be confused with market analysts... that's micro-econ.. focus.. focus...)
at some point it is not a matter of simple economics. it is a matter of individual civil liberties. I earned that money. I created wealth by producing a product. I should be able to spend it/save it as i see fit.
and you cannot just say its a macro issue. macro and micro are connected. you mess with one you mess with the other.... but you arent an economist either. how would you know that?
Ok Duty, if Obama is doing such a great job according to these democrat economists you are always preaching about then would you care to explain why the Wall Street Journal did a poll of some top Economists and they said he was failing at helping the economy with his efforts?
There is a simple fact that the usual tax and spend mentallity does not work. Period. Yes roads and bridges area great thing, but building them is NOT a way to bring us out of this slump we are in. Cutting taxes, putting more money in the pockets of everyone so they can spend and save will help. The banks are failing, so if we are putting more money in them for savings it will help them. Consumer confidence is down, so put more money into peoples hands so they can spend it. Middle class America HAS to spend money. We all have Bills we have to pay, clothing we have to buy, food we have to buy, gas we have to buy, and the list goes on and on. Now if you have more money to buy those things, you will buy more food, then you will start buying other things. Those little extras you won't buy when things are tight. THAT will stimulate the economy my friend. That is what will drive us forward through these tough times because that is what has driven our great nation from the beginning.
Give a rich man $20.. where does the money go?
Into his bank account
What does the bank do with the money while the rich man has saved it? They are loaning that money to somebody else. Assuming that the banks lends it to someone who pays it back (big assumption, I know), then the bank has made money and the rich man can still spend his money when he wishes. This has begun the cycle of creating wealth for multiple people.
And credit, in general, creates a false economy that runs smoothly up until the point somebody elects not to recycle the pretend money.
Ok, I had to go back to this statement because it is a prime example of why what the government is doing is WRONG. President Bush was wrong when he did it, and President Obama is wrong now that he is doing it. The government spending these billions of Dollars is causing us to go into debt to countries like China. Now They are giving us credit... This is also creating a false economy by your definition... That pretend money doesn't get recycled and all the sudden we are in big trouble. Why is it ok for the government to do this but not private citizens?
My problem with your economic threories is that you believe the government is so much smarter than all of us and they should control where the money is spread around. We as a people can do the same thing much more efficiently and create more wealth than the government ever could. If the government cuts taxes across the board we all have more money to spend, then the government cuts spending and takes care of the money we already owe people and our entire economic situation is better now, and in the long run.
One other side note, how in the hell does spending like this stimulate the economy or do any good at all for ANYONE????
I never said the government is smarter than us and that they better understand where the money needs to be spread around. What I said is that the government is very good at getting money moving.
Kuzi's lovely horse/apple farm example is a perfect demonstration of a micro-economic view. It equates dollars in hand (in this case IOU's) with actual wealth. In a strictly micro-economic sense, that is true. However, if that wealth does not continue to flow through the economy, it becomes worth less.
Let's reduce the world to those same two guys, and $100. One continues to buy apples, and the other occassionally buys a horse. One day, the guy selling apples sees that his neighbor has started buying fewer apples, so he decides he'll hold off on purchasing that horse. The guy with the horses wants some apples, but he suddenly can't afford to buy them because the guy with the apples didn't buy any horses lately. So, of course, the guy selling apples sees that he was smart to hold onto his money because the apple demand did in fact decrease, so he continues to not buy horses.
With only $100 total in existence in the entire world, it is possible for EVERYBODY to have TRILLIONS of dollars in income EVERY YEAR!!! Of course, if somebody gets the $100 and decides to sit on it, EVERYBODY'S income drops to ZERO. Wait, how can this be? Is there suddenly less money in the world? No. The money isn't moving as quickly.
Now, let's expand this to a true macro-economic example, where these men are dealing with other communities that have their own economies. Back when they were swapping $100 back and forth at lightning speed, they had huge wealth. The high speed of their currency made it possible to ship goods outside their economy at a low cost. Likewise, they could afford to purchase goods from other economies, because their own dollars had a high value. Now, with their dollar moving more slowly, it is worth a lot less on the world market. As the value of their dollar collapses, their ability to afford even basic necessities from outside communities is strained.
Wealth is not simply the accumulation of money. If you accumulate half of the U.S. Dollars in existence, while the value of that dollar falls to zero, you are broke. If you accumulate a tiny fraction of the U.S. Dollars in existence, and the value of that dollar escalates, you have real wealth. But if everybody does this and decides to sit on those dollars, their wealth drops to zero.
Wealth is a function of currency in hand and the value of that currency. Currency gains and retains value only by moving rapidly through the economic system. Even if everybody understood this, you would still need an entity to ensure that the money moves. Think of it as a traffic system for your currency.
With respect to debt, it is actually brilliant to go into debt to a foreign economy when your dollar is strong. Once your dollar tanks, you effectively owe less
Ok Duty, if Obama is doing such a great job according to these democrat economists you are always preaching about then would you care to explain why the Wall Street Journal did a poll of some top Economists and they said he was failing at helping the economy with his efforts?
Neat... now, if you actually READ the survey RESULTS, you will find that 68% of the economists felt that the Stimulus Package was either JUST RIGHT or NOT BIG ENOUGH!!
To put it another way, it seems that a number of economists feel Obama's economic policies should be less conservative. So whose point does this article make, anyway?
I don't disagree with what is in there. I do disagree with our own government's loss of focus in attacking this problem. Trying to tackle health care reform in the midst of this crisis is a terrible idea. Spending money on all these extra programs that are tacke onto the stimulus is a bad idea. Putting out a stimulus with no real guidelines or restrictions on how and where the money should be used is irresponsible.
It also says to act quickly. I would imagine letting a bill sit on one's desk so the public can bicker about it would go against that. It says to save lots of money 10 years ago. We can't go back in time and do that. It also relates transparency to the behavior of our private institutions. The FDIC and SEC do a much better job at that.
Ok Duty, if Obama is doing such a great job according to these democrat economists you are always preaching about then would you care to explain why the Wall Street Journal did a poll of some top Economists and they said he was failing at helping the economy with his efforts?
Neat... now, if you actually READ the survey RESULTS, you will find that 68% of the economists felt that the Stimulus Package was either JUST RIGHT or NOT BIG ENOUGH!!
To put it another way, it seems that a number of economists feel Obama's economic policies should be less conservative. So whose point does this article make, anyway?
Well the fact that that figure of 68% is nowhere in this article, I would say it damn sure doesn't make your point...
I never said the government is smarter than us and that they better understand where the money needs to be spread around. What I said is that the government is very good at getting money moving.
Kuzi's lovely horse/apple farm example is a perfect demonstration of a micro-economic view. It equates dollars in hand (in this case IOU's) with actual wealth. In a strictly micro-economic sense, that is true. However, if that wealth does not continue to flow through the economy, it becomes worth less.
Let's reduce the world to those same two guys, and $100. One continues to buy apples, and the other occassionally buys a horse. One day, the guy selling apples sees that his neighbor has started buying fewer apples, so he decides he'll hold off on purchasing that horse. The guy with the horses wants some apples, but he suddenly can't afford to buy them because the guy with the apples didn't buy any horses lately. So, of course, the guy selling apples sees that he was smart to hold onto his money because the apple demand did in fact decrease, so he continues to not buy horses.
With only $100 total in existence in the entire world, it is possible for EVERYBODY to have TRILLIONS of dollars in income EVERY YEAR!!! Of course, if somebody gets the $100 and decides to sit on it, EVERYBODY'S income drops to ZERO. Wait, how can this be? Is there suddenly less money in the world? No. The money isn't moving as quickly.
Now, let's expand this to a true macro-economic example, where these men are dealing with other communities that have their own economies. Back when they were swapping $100 back and forth at lightning speed, they had huge wealth. The high speed of their currency made it possible to ship goods outside their economy at a low cost. Likewise, they could afford to purchase goods from other economies, because their own dollars had a high value. Now, with their dollar moving more slowly, it is worth a lot less on the world market. As the value of their dollar collapses, their ability to afford even basic necessities from outside communities is strained.
Wealth is not simply the accumulation of money. If you accumulate half of the U.S. Dollars in existence, while the value of that dollar falls to zero, you are broke. If you accumulate a tiny fraction of the U.S. Dollars in existence, and the value of that dollar escalates, you have real wealth. But if everybody does this and decides to sit on those dollars, their wealth drops to zero.
Wealth is a function of currency in hand and the value of that currency. Currency gains and retains value only by moving rapidly through the economic system. Even if everybody understood this, you would still need an entity to ensure that the money moves. Think of it as a traffic system for your currency.
With respect to debt, it is actually brilliant to go into debt to a foreign economy when your dollar is strong. Once your dollar tanks, you effectively owe less
Ok, now lets take this same example and do something you FAILED to do. Make it realistic as far as your economic ideas go.
Now say the government comes in and takes $45 of that $100 and spreads it around to all the other communities, now the person buying apples and they guy buying horses both have less money and realize they need to save more for a rainy day. Now the government goes and "redistributes" that wealth and they each get back $5... Ok, so now they have half the money they started with and are trying to save some in case things get bad and business slows down even more. That in turn DOES cause business to slow. The guy selling apples realizes he can't maintain his farm on $50 and closes his doors. After he does that the goverment comes in and pays him money to get back on his feet. He gets his apple farm back, but then when the gornment starts taxing him, he is back to $50 and can't do it... Doors close again and he is back on the government teet...
The government welfare state you and our President and most of the Democratic party want to create is worse than ANY narcotic out there because it forces you to keep turning to it. Once you are hooked you can't EVER get out. Well not without massive policy changes.
Comments
I'm thinking maybe you misunderstood my comment....I did not say anyone can predict anything about the man or his presidency...I said some close to and privy to his decisions (not you or I) are concerned with his ability to govern and lead and that he may just not be quite what he was advertised as in the election process...this is no crime as he won't be the first or last....it is what it is....I myself am concerned with the spending and lack of oversight / control with it and the things he seems to think will fix the economy. Some seem foolish, some seem good,none seem perfect but I don't think perfect exists. (On a side note my portfolio has done ok over the past 25 years for a coupla reasons,I did all my own extensive research, bought in companies I knew something about, did not buy into the "irrational exuberance" of the go go days, and took with a grain of salt and researched any investment advice myself if given to me by someone who stood to profit from said advice if all I had to do was buy and it didn't matter if the suggestion was profitable)
As far as my portfolio, I've done poorly in my 401(k), but my investment choices with that money are very limited... I have been lucky to fare better than most with my allocations (like none of it in company stock). Still, there were no elections available outside of straight money market (which is where my pension currently sits) that would have afforded the opportunity to make money. My independent investments (in a Roth IRA) have pretty much broken even since we opened the accounts (in 1999)... so I'm definitely not doing great in that department, either. I actually have done a bit better since I turned the bulk of those investments over to an investment manager. I have other guaranteed investments that have a small return (4.5%), which are the staple of my long-term plan. Those conservative plays have turned into my shining star from an investment perspective. By the time I retire, I expect (and hope) that they won't be the bulk of my return, but for now they give me a little peace of mind.
Sort of along the same line as "part of getting a good deal is recognizing it". I understand and even somewhat agree.
yes i have more than a lot of people in the US. that does not mean that i should give up what i worked hard to get so that people who are not as well off as me can make money off of my work. IT comes down to creation of wealth and the evolution of money. that is what i want to talk about when i have more time.
the opinions of this type posts excites the nervous system and allows for the head part of the body to hurt with knowledge.
Joe
Just thought I would post for that wild and crazy guy since we havn't heard from him in two or three days....( Oh Chit ...I slay me ...hahahahaha)
Of course, if you choose to do this in faith that others will do the same, they will not reciprocate. That is where taxation comes in, and that is the lifeblood of a well-oiled economic machine. Not that you will ever recognize that. If our economy becomes stronger than ever under this new president, you will not see it because you won't permit yourself to see it, and you will have already convinced yourself that you would be better off under a different economic policy. This is why this discussion will never achieve its end. Its complexity in theory far exceeds what it would take to understand fundamental (and sound) business practices, which is where conservative policy-makers have failed to progress in their thinking. It is also the reason that a successful businessman would make a great politician at the local level, and a terrible one at the national level.
and this we should learn from japans mistakes.
saving will help this situation. putting money in the bank will help this situation. paying off debt will help our situation. How? the banks will have more money to pay off debt.
we are both talking about injecting money into the system. the only problem is, your way creates no new wealth, where my way does. you cannot create wealth by taking it from others and redistributing it. its never happened before. your just moving around wealth that is already there. there are no new wealth creating projects in building roads. noboby makes a wealth off of the road itself. not even the government. a few people get paid in the process, but they are temporary jobs.
i have a right as a US citizen to spend or not spend my money as i feel fit. the government should not be aloud to arrogantly come in and steal what i earned because they feel that i am not spending it the way they want. When the government takes over the wealth creation system via taxation we have a problem. THAT IS WHAT SOCIALISM IS. and socialism fails every time it is tried. that is what YOU fail to see.
and if this country sinks deeper aand deeper into depression you will fail to see as well. you will only say there is not enough regulation. you are so set in your ways you will never want to see it another way even though the capitalist system has made the US one of the greatest and wealthiest nations in the history of the world.
Putting money in the hands of people that spend it rapidly is the best way to heal a struggling economy. Keeping money in the pockets of those who like to sit around and look at it is the best way to create what we've got.
Explain to me again how our system of roads does nothing to further our economy?
here goes
the evolution of money
i own a horse farm. down the road bob owns an apple farm. one day bob comes up the road to see me and says, "hey kuzi, i need a horse so that i can make my farm work better"
"ok" i say "but i need something in return. what you have that i can have in return?"
we strike a deal that i will accept 10 bushels of apples in exchange for one horse.
this goes on for a while. sometimes bob initiates the trade, sometimes I do.
One day i go up the road to see bob and say, "hey man, can i get some apples and ill give you a horse?"
bob looks at me and says " well, i already have enough horses. how about i give you the apples and you give me an IOU for a horse later?"
i agree. we now have a bit of paper that is worth one horse.
if someone else comes along and asks bob for a horse bob can give this new guy the IOU in exchange for whatever good that guy is producing. that guy then has a bit of paper worth one horse.
the government then comes along and takes one of every five horses i have and one of every five bushels of apples that bob has. this is an increase from the 1 in 10 they were already taking they say they are gunna use these items to repair the road. the road gets repaired and bob and i both have the same deal, however we just have 10% less stuff to make a deal with. did the road help us? yes. was it the road repairs themselves that created wealth? no.
the apples and the horses that were consumed during the production of the road are now gone. not only did the government works problem not create wealth, it destroyed some. No new wealth was ever put into the system. it was taken from the people producing it, and consumed. the government didnt make money off of it, and the people were taxed more. the people cant sell the road. they cant buy it. they can use it. the road doesnt create the wealth, the people do.
and you cannot just say its a macro issue. macro and micro are connected. you mess with one you mess with the other.... but you arent an economist either. how would you know that?
http://online.wsj.com/article/SB123671107124286261.html
There is a simple fact that the usual tax and spend mentallity does not work. Period. Yes roads and bridges area great thing, but building them is NOT a way to bring us out of this slump we are in. Cutting taxes, putting more money in the pockets of everyone so they can spend and save will help. The banks are failing, so if we are putting more money in them for savings it will help them. Consumer confidence is down, so put more money into peoples hands so they can spend it. Middle class America HAS to spend money. We all have Bills we have to pay, clothing we have to buy, food we have to buy, gas we have to buy, and the list goes on and on. Now if you have more money to buy those things, you will buy more food, then you will start buying other things. Those little extras you won't buy when things are tight. THAT will stimulate the economy my friend. That is what will drive us forward through these tough times because that is what has driven our great nation from the beginning.
My problem with your economic threories is that you believe the government is so much smarter than all of us and they should control where the money is spread around. We as a people can do the same thing much more efficiently and create more wealth than the government ever could. If the government cuts taxes across the board we all have more money to spend, then the government cuts spending and takes care of the money we already owe people and our entire economic situation is better now, and in the long run.
One other side note, how in the hell does spending like this stimulate the economy or do any good at all for ANYONE????
http://www.foxnews.com/politics/elections/2009/03/11/massachusetts-spending-millions-earmarks-kennedy-legacy/
Kuzi's lovely horse/apple farm example is a perfect demonstration of a micro-economic view. It equates dollars in hand (in this case IOU's) with actual wealth. In a strictly micro-economic sense, that is true. However, if that wealth does not continue to flow through the economy, it becomes worth less.
Let's reduce the world to those same two guys, and $100. One continues to buy apples, and the other occassionally buys a horse. One day, the guy selling apples sees that his neighbor has started buying fewer apples, so he decides he'll hold off on purchasing that horse. The guy with the horses wants some apples, but he suddenly can't afford to buy them because the guy with the apples didn't buy any horses lately. So, of course, the guy selling apples sees that he was smart to hold onto his money because the apple demand did in fact decrease, so he continues to not buy horses.
With only $100 total in existence in the entire world, it is possible for EVERYBODY to have TRILLIONS of dollars in income EVERY YEAR!!! Of course, if somebody gets the $100 and decides to sit on it, EVERYBODY'S income drops to ZERO. Wait, how can this be? Is there suddenly less money in the world? No. The money isn't moving as quickly.
Now, let's expand this to a true macro-economic example, where these men are dealing with other communities that have their own economies. Back when they were swapping $100 back and forth at lightning speed, they had huge wealth. The high speed of their currency made it possible to ship goods outside their economy at a low cost. Likewise, they could afford to purchase goods from other economies, because their own dollars had a high value. Now, with their dollar moving more slowly, it is worth a lot less on the world market. As the value of their dollar collapses, their ability to afford even basic necessities from outside communities is strained.
Wealth is not simply the accumulation of money. If you accumulate half of the U.S. Dollars in existence, while the value of that dollar falls to zero, you are broke. If you accumulate a tiny fraction of the U.S. Dollars in existence, and the value of that dollar escalates, you have real wealth. But if everybody does this and decides to sit on those dollars, their wealth drops to zero.
Wealth is a function of currency in hand and the value of that currency. Currency gains and retains value only by moving rapidly through the economic system. Even if everybody understood this, you would still need an entity to ensure that the money moves. Think of it as a traffic system for your currency.
With respect to debt, it is actually brilliant to go into debt to a foreign economy when your dollar is strong. Once your dollar tanks, you effectively owe less
To put it another way, it seems that a number of economists feel Obama's economic policies should be less conservative. So whose point does this article make, anyway?
It also says to act quickly. I would imagine letting a bill sit on one's desk so the public can bicker about it would go against that. It says to save lots of money 10 years ago. We can't go back in time and do that. It also relates transparency to the behavior of our private institutions. The FDIC and SEC do a much better job at that.
Now say the government comes in and takes $45 of that $100 and spreads it around to all the other communities, now the person buying apples and they guy buying horses both have less money and realize they need to save more for a rainy day. Now the government goes and "redistributes" that wealth and they each get back $5... Ok, so now they have half the money they started with and are trying to save some in case things get bad and business slows down even more. That in turn DOES cause business to slow. The guy selling apples realizes he can't maintain his farm on $50 and closes his doors. After he does that the goverment comes in and pays him money to get back on his feet. He gets his apple farm back, but then when the gornment starts taxing him, he is back to $50 and can't do it... Doors close again and he is back on the government teet...
The government welfare state you and our President and most of the Democratic party want to create is worse than ANY narcotic out there because it forces you to keep turning to it. Once you are hooked you can't EVER get out. Well not without massive policy changes.