Why do you still believe...?

[Aesa]

Why is it that people are still foolish enough to believe that stimulus packages (creating more debt) will stimulate the economy?

Why do people think that the government putting more money in their pocket will solve the problem?

All that is happening is the creation of more debt and inflation? Tell me, how can creating more debt and inflation solve the problem of debt and inflation?

[FunkyTown]

Why is it that people are still foolish enough to believe that stimulus packages (creating more debt) will stimulate the economy?

Why do people think that the government putting more money in their pocket will solve the problem?

All that is happening is the creation of more debt and inflation? Tell me, how can creating more debt and inflation solve the problem of debt and inflation?

You will never be able to understand or even stop the group that is trying to push this through without first understanding why they're doing it.

The stimulus package is not being written by a bunch of Snidely Snide black-hatted villains desperately looking to line their pockets with whatever nickels they can roll off of the local orphanage.

The issue at hand right now is that, after a series of financial bubbles have burst, people have lost faith in their economic system and government. This has resulted in less purchasing and debt accrual by a nation that has acted as the economic juggernaut of the world. Here is what the stimulus package is meant to do -by their own vision-. Whether it works or not is up to debate, but here is the theory behind it:

1) Tax breaks for the middle class - By freeing up economic funds, more moneys will be pumped in to the economy. This will allow more hiring and more development.

2) Makework projects and public works - By creating jobs for people without positions, you lower unemployment and allow greater discretionary income. This results in more purchasing, which requires more workers and employees to keep up with increased demand. In theory, this will allow the country to phase out the makework projects as the economy gets back on track.

3) Guarantees on bank loans - By guaranteeing bank loans, banks are more likely to free up money to allow greater development by companies. This will in turn require more employees, allowing more jobs and greater financial freedom.

4) "Pork" projects and tax cuts for the wealthy companies - This was something the much vaunted President Reagan used. He called it his 'Trickle down' theory. When money is freed up by the wealthy, when it's thrown their way, it will trickle down to the masses as they require people for their own projects.

Lots of people have used this type of thinking since time immemorial in the US. The people involved are betting on hope. If they don't, we will definitely go in to a very serious recession where families will be in trouble, companies will fold and the poor will get poorer. If we -do- follow this, we might get out. Of course, if it doesn't work, it will create a perfect financial storm where inflation will skyrocket, the middle class will be destroyed even with considerable financial savings and unemployment will be crushing. It will be as bad as Germany pre-World War II.

People are betting on hope, but I'm planning on the worst. Time to get my food storage running.

[Moksha]

Why is it that people are still foolish enough to believe that stimulus packages (creating more debt) will stimulate the economy?

Why do people think that the government putting more money in their pocket will solve the problem?

Giving revenues back at a time of exploding debt is pretty dumb, is it not? Perhaps we would be much better off waiting till unemployment has reached such a massive level, that politics can not be played without the masses shaking their angry fists in outrage.

In the mean time, we should put an immediate halt to the Iraq war, since we are hemorrhaging money over there. Now is not the time to throw good money after bad. This is the mistake so many gamblers make, thinking they will magically recoup their squandered money. Just admit we have a problem with unwinnable wars and that we need to seek help from a Higher Power.

:)

[LittleWyvern]

Why is it that people are still foolish enough to believe that stimulus packages (creating more debt) will stimulate the economy?

Why do people think that the government putting more money in their pocket will solve the problem?

All that is happening is the creation of more debt and inflation? Tell me, how can creating more debt and inflation solve the problem of debt and inflation?

hai, thx for calling me foolish ^____^

More seriously, it's not that the stimulus is just creating debt, it's also pumping money into the parts of the country that are money-makers, so to speak: industry, business, etc (trickle up rather than the obviously failed trickle down). It is hoped that these areas of the nation will be "stimulated" to produce more goods, thereby indirectly increasing the rate at which money flows through the economy, thereby providing a means to reduce debt and inflation.

I know this is a simplistic analogy, but it's how I understand it.

[Just_A_Guy]

In the mean time, we should put an immediate halt to the Iraq war, since we are hemorrhaging money over there.

Actually, most of the money currently going to Iraq is money we promised to contribute at the Madrid Conference. Mostly we're just making payments on a debt we incurred six years ago. If we pulled our boys out of Iraq, they'd just be on the next plane to Afghanistan. So we're going to be paying for their deployment either way.

trickle up rather than the obviously failed trickle down

Trickle-down isn't doing so hot because the capitalists have been losing their shirts of late, and are risk-averse when it comes to putting any more capital on the table. That will pass. It would pass faster if Wall Street weren't scared stiff that our current leadership is about to nationalize whatever assets they have left.

Forced to choose between Reagan's "voodoo economics" and Obama's "fix your credit problems by spending more money" nonsense, I know whose approach I like better. Keynesian economic policy might provide modest job gains in the short term. But all that is for naught if governments can never muster the political will to pay off their debts during the good years; and everything implodes a few decades down the road.

Edited February 24, 2009 by Just_A_Guy

[LittleWyvern]

Trickle-down isn't doing so hot because the capitalists have been losing their shirts of late, and are risk-averse when it comes to putting any more capital on the table. That will pass. It would pass faster if Wall Street weren't scared stiff that our current leadership is about to nationalize whatever assets they have left.

The trickle-down theory isn't just "not doing so hot," it's never worked throughout the entire history of the United States. Those at the top simply will not and have not let it work (due to greed, probably).

[Just_A_Guy]

With all due respect, the data from the 80s and 90s would seem to disagree with you. (And yeah, I realize that we can argue about causality until the cows come home.)

The rich try to make more money by investing in businesses (which employ other people); and the rich spend their money by buying things (which are made by other people). They couldn't stop trickle-down economics from improving the lot of the lower classes unless they burned their dollars and moved off to a monastery somewhere.

[LittleWyvern]

(And yeah, I realize that we can argue about causality until the cows come home.)

Yeah, I'd rather not. Can we just agree to disagree?

[Just_A_Guy]

Good heavens, yes! :)

[jadams_4040]

You will never be able to understand or even stop the group that is trying to push this through without first understanding why they're doing it.

The stimulus package is not being written by a bunch of Snidely Snide black-hatted villains desperately looking to line their pockets with whatever nickels they can roll off of the local orphanage.

The issue at hand right now is that, after a series of financial bubbles have burst, people have lost faith in their economic system and government. This has resulted in less purchasing and debt accrual by a nation that has acted as the economic juggernaut of the world. Here is what the stimulus package is meant to do -by their own vision-. Whether it works or not is up to debate, but here is the theory behind it:

1) Tax breaks for the middle class - By freeing up economic funds, more moneys will be pumped in to the economy. This will allow more hiring and more development.

2) Makework projects and public works - By creating jobs for people without positions, you lower unemployment and allow greater discretionary income. This results in more purchasing, which requires more workers and employees to keep up with increased demand. In theory, this will allow the country to phase out the makework projects as the economy gets back on track.

3) Guarantees on bank loans - By guaranteeing bank loans, banks are more likely to free up money to allow greater development by companies. This will in turn require more employees, allowing more jobs and greater financial freedom.

4) "Pork" projects and tax cuts for the wealthy companies - This was something the much vaunted President Reagan used. He called it his 'Trickle down' theory. When money is freed up by the wealthy, when it's thrown their way, it will trickle down to the masses as they require people for their own projects.

Lots of people have used this type of thinking since time immemorial in the US. The people involved are betting on hope. If they don't, we will definitely go in to a very serious recession where families will be in trouble, companies will fold and the poor will get poorer. If we -do- follow this, we might get out. Of course, if it doesn't work, it will create a perfect financial storm where inflation will skyrocket, the middle class will be destroyed even with considerable financial savings and unemployment will be crushing. It will be as bad as Germany pre-World War II.

People are betting on hope, but I'm planning on the worst. Time to get my food storage running.

Lets all bet on hope. cause if it doesnt work; its going to be a whole lot worse than a simple recession; The past administration set on its hands for 8 years and did absolutely nothing to keep this from happening; the corporations and ceo,s. made billions and trillions of dollars while the average working class wages went down 2000 dollars a year; From 92 to 2000 there was over 22 million jobs created, bush ended up with maybe 3-4 million, and those jobs were low paying or decreased in wage average, while we gave huge tax breaks to companies that hired overseas because the theory is that Cheap products made by cheap wage erners will decrease inflation and cause all of us americans to but more cause the product was supposed to be cheaper, so thats why they paid corporations to hire overseas. These "big" corporations just cannot understand that the average wage earner {us} is the ones whom buy there products and when they replace our jobs with cheap foriegn labor, sooner or later it catches up. of course this is not the only reason we are in truoble but this is the basic economic theory of many differant things in the past 8 years that now absolutely needs to be reversed. were talking "depression" not recession. And a depression nowdays would be catasrophic as people could not survive w/out electricity. grocery stores, money e;t;c.... and this is what happens when a financial meltdown hits. So lets all hope and pray the stimiulas works and people get back to work cause it is the only way to prevent complete tragedy.

[Just_A_Guy]

I think Bytor has successfully attacked the notion of "sit-on-his-hands Bush" here. And he didn't even bring in that whole TARP package, and the individual government bailouts that preceded it.

There are those who are already trying to morph the historical narrative into a story whereby Bush becomes a second Herbert Hoover. They forget that even Hoover, when you get right down to it, was not a Herbert Hoover.

I hope Obama's plan works. I also hope that I'll start laying golden eggs in the morning. I don't expect either to happen; though the temporary disappearance of the estate tax next year may facilitate some re-investment.

Edited February 24, 2009 by Just_A_Guy

[blusun7]

it wont work. i agree with the original post starter.

This will not work and is against the constitution. Section 14 i believe. The goverment knows this but the goverment is evil now.They want the dollar bill to go away so they can have the new world order. Its talked about in revelations. Joseph Smith said banks will fail(in his prophesy) There is no optimism but to prepare. Embrace the reality.

Hyperinflation will come in less than two years.Why? cause the only way to relieve debt is to create jobs.which as a nation we dont have enough. We love credit and the middle class needs it.

[MarginOfError]

I've been against most of the bail-outs and stimulus packages since they started discussing them. The only 'bailout' they've produced that is of any worth was the mortgage bailout. This is precisely what they should have done with all of the bailouts. That is, pay down mortgages that are in trouble; refinance the loans at lower, fixed interest rates. This infuses money into the banks in trouble and frees up discretionary money in homeowners in the form of lower monthly mortgage payments.

I don't believe the government is evil. I just don't believe that the average politician is any smarter than the average person (meaning 64% of them have an IQ between 85 an 115). What's more, they need convenient quick solutions for their own reelection, and making good decisions usually doesn't fit those criteria.

[FunkyTown]

I have to disagree, Moe.

While I have been on your side for most things, I must admit I have now changed my tune. I now believe that the government is full on Eeeeeeevil. They are puppy-kicking, Necrophagic(That means they eat the dead!), kitten punching orphan killers. They wear fur, eat nothing but family pets and salute the forces of Eeeeeevil.

There's no other possible explanation, Moe. I can't imagine that anyone could possibly disagree with Blusun's interpretation of the constitution, nor can I accept that there might be even a shred of logic involved in what the opposition is doing.

This can't possibly be a tragic event facilitated by short-sighted selfishness on behalf of everyone. Nope. It's the politicians. They're evil.

Give me my Libertarian T-shirt, I'm SIGNIN' ON!

Oh, wait... I take that back. I just realized I went temporarily insane. Sorry, Moe. I now direct you back to your regularly scheduled programming.

[hordak]

In the mean time, we should put an immediate halt to the Iraq war, since we are hemorrhaging money over there.

:)

Th problem with that IMO is we have created a crisis by removing Sadam and up and leaving people hanging after they have help us remove our enemy has not proved very effective. We did this with Afghanistan.

It would be like an exterminator coming to your house and destroying the walls to get rid of the mouse. Should they stay and help you dry wall, or just leave because "the job is done"?

[Hemidakota]

Why is it that people are still foolish enough to believe that stimulus packages (creating more debt) will stimulate the economy?

Why do people think that the government putting more money in their pocket will solve the problem?

All that is happening is the creation of more debt and inflation? Tell me, how can creating more debt and inflation solve the problem of debt and inflation?

Those who grope in darkness always seeking the wrong savior for their plight in life.

No different from the days of Jaredites and the Nephites who used monetary to control the minions.

It will fail....so will the party.

[Moksha]

It would be like an exterminator coming to your house and destroying the walls to get rid of the mouse. Should they stay and help you dry wall, or just leave because "the job is done"?

Send in the Peace Corp if they could be safe. The were much less expensive to maintain and they actually made people like America. If it is too unsafe for them, then the army being there to "help out" is delusional. :)

[Just_A_Guy]

The Peace Corps' annual budget--330 million, per the gods at Wikipedia--is a drop in the bucket compared to what was needed in Iraq. Nor would it have helped our popularity much to pull the Peace Corps out of the 70-odd countries where it functions and redirect all of its resources to Iraq.

Moreover, much (though by no means all) of the actual reconstruction in Iraq was done under the aegis of the State Department, not the Pentagon (though there were some titanic power struggles between the two in the early stages of the war).

[Aesa]

In the mean time, we should put an immediate halt to the Iraq war, since we are hemorrhaging money over there.

Do you honestly think that'll happen? Don't the trends tell you that bigger wars break out when the financial system is going to break? The whole profit/control thing?

More seriously, it's not that the stimulus is just creating debt, it's also pumping money into the parts of the country that are money-makers, so to speak: industry, business, etc (trickle up rather than the obviously failed trickle down). It is hoped that these areas of the nation will be "stimulated" to produce more goods, thereby indirectly increasing the rate at which money flows through the economy, thereby providing a means to reduce debt and inflation.

It seems like a logical understanding. But do you really think that the proportion of goods and services created through this so called stimulus will even near match the amount of money that will be printed out of thin air?

If it doesn't you have a majorly debased currency and in the current state of the U.S., dollar I'm sure you're aware the US cannot afford that?

Obama's "fix your credit problems by spending more money" nonsense

This is not Obama's idea. Clearly it's the motive of those men behind the scenes, the international bankers because Kevin Rudd, Gordon Brown, etc same to have the same "idea."

The trickle-down theory isn't just "not doing so hot," it's never worked throughout the entire history of the United States. Those at the top simply will not and have not let it work (due to greed, probably).

I don't really understand free market capitalism as much as I would like to, as soon as I get the time I'm going to stronger research it for myself. My understand behind that notion is that the idea of the free markets is that in regard to economics we should just "let nature" yes?

The problem is, in a system where profit is rewarded (the one who profits more has more access to the things priced by money) you will always have an elite turn up (who are the richest, generally) who take control. This is because differential advantage, and profit are rewarded.

Lets all bet on hope. cause if it doesnt work; its going to be a whole lot worse than a simple recession;

So let's all just go along to get along with evil (for lack of better word) is what you're saying?

I read the Book of Mormon last year and I could swear there's at least one verse in there about suffering (and other traits) to defeat evil. Though, I can't pinpoint it... but I'm sure there was something like that in there.

So lets all hope and pray the stimiulas works and people get back to work cause it is the only way to prevent complete tragedy

Honey, have you seen the difference between the debt in the time of the "Great Depression" and now? We are in WAYY more debt than then, and we don't have a commodity standard now. Most of us don't even know how to be provident - eg: store, or grow, food.

It's going to take a major collapse, that affects everyone to get in the system... to get them to ask "Isn't there a better way?" That's my view.

I don't believe the government is evil. I just don't believe that the average politician is any smarter than the average person (meaning 64% of them have an IQ between 85 an 115).

Truly, there is no shortage of anything except brains in Washington (and might I say, everywhere else).

I don't believe the government is "evil" either, merely that they are in conditions which produce bad, stupid, irrelevant behaviour.

Send in the Peace Corp if they could be safe. The were much less expensive to maintain and they actually made people like America. If it is too unsafe for them, then the army being there to "help out" is delusional.

The Army is exacerbating the situation just like they did in Vietnam. Like pouring Iodine on a bleeding wound.

[LittleWyvern]

It seems like a logical understanding. But do you really think that the proportion of goods and services created through this so called stimulus will even near match the amount of money that will be printed out of thin air?

If it doesn't you have a majorly debased currency and in the current state of the U.S., dollar I'm sure you're aware the US cannot afford that?

Yes, it needs to be very carefully considered how much money to print and how much money to simply redirect. I believe, with enough care, that it can be done, but explaining how to do this (or, how to find the right balance) goes beyond my knowledge of economics.

[Aesa]

It definitely cannot be done because the whole system is unsustainable inherently. It's based on expansions and contractions which for one thing, is completely out of line with how natural systems work.

Money obviously isn't natural but we objectify it in such a way that people could not even fathom a world without it ... even though we would be considerably better off, but I digress.

[FunkyTown]

It's based on expansions and contractions which for one thing, is completely out of line with how natural systems work.

Except the heart, lungs, kidneys various other natural systems that are based on expansions and contractions of course.

[Hemidakota]

Yes, it needs to be very carefully considered how much money to print and how much money to simply redirect. I believe, with enough care, that it can be done, but explaining how to do this (or, how to find the right balance) goes beyond my knowledge of economics.

There is already federal investigations concerning abusing the TARP money. It never ends... As I said, it will fail.

[Elphaba]

There is already federal investigations concerning abusing the TARP money. It never ends... As I said, it will fail.

Hemi,

Do you have a link to this?

Elphaba

[Elphaba]

There is already federal investigations concerning abusing the TARP money.

Hemi,

Do you have a link to this?

Elphaba