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On January 30 2012 10:10 Sanctimonius wrote:
What about Paul? Seems like the only candidate here actually trying to put through a message. it's a shame the media doesn't seem to care a bit about him.
Yeah its depressing that even before the buildup to the general election, our political system has prioritized 1)money and 2)bashing an opponent. I have watched several of the debates, and I have no idea what anyone but Paul would do in office.
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On January 30 2012 10:07 liberal wrote:
Actually, I'm still trying to decide in my mind who is worse, Bush or Obama. Bush was an obvious moron and a warmonger, Obama skyrocketed US debt and pushed the wrong health care reform.
That... not so much.
+ Show Spoiler +
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On January 30 2012 10:42 Mindcrime wrote:Show nested quote +On January 30 2012 10:07 liberal wrote:
Actually, I'm still trying to decide in my mind who is worse, Bush or Obama. Bush was an obvious moron and a warmonger, Obama skyrocketed US debt and pushed the wrong health care reform. That... not so much. + Show Spoiler +
Thats also 3 years in office vs. 8 years in office, so it isn't quite as onesided as the chart would suggest. I do agree that Bush was a terrible president for the economy.
EDIT:
I forgot about various unfunded liabilities being much higher for Obama's term than Bush's, but we haven't actually spent those dollars yet, so hypothetically we could cut some amount of those.
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On January 30 2012 11:23 Mordanis wrote:Show nested quote +On January 30 2012 10:42 Mindcrime wrote:On January 30 2012 10:07 liberal wrote:
Actually, I'm still trying to decide in my mind who is worse, Bush or Obama. Bush was an obvious moron and a warmonger, Obama skyrocketed US debt and pushed the wrong health care reform. That... not so much. + Show Spoiler + Thats also 3 years in office vs. 8 years in office, so it isn't quite as onesided as the chart would suggest. I do agree that Bush was a terrible president for the economy. EDIT: I forgot about various unfunded liabilities being much higher for Obama's term than Bush's, but we haven't actually spent those dollars yet, so hypothetically we could cut some amount of those.
I would argue the policies by Bush left Obama with no where to go when the financial crisis hit. People needed aid in the U.S., but that would add to the shortcoming already built into the budget by that point.
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On January 30 2012 12:08 aksfjh wrote:Show nested quote +On January 30 2012 11:23 Mordanis wrote:On January 30 2012 10:42 Mindcrime wrote:On January 30 2012 10:07 liberal wrote:
Actually, I'm still trying to decide in my mind who is worse, Bush or Obama. Bush was an obvious moron and a warmonger, Obama skyrocketed US debt and pushed the wrong health care reform. That... not so much. + Show Spoiler + Thats also 3 years in office vs. 8 years in office, so it isn't quite as onesided as the chart would suggest. I do agree that Bush was a terrible president for the economy. EDIT: I forgot about various unfunded liabilities being much higher for Obama's term than Bush's, but we haven't actually spent those dollars yet, so hypothetically we could cut some amount of those. I would argue the policies by Bush left Obama with no where to go when the financial crisis hit. People needed aid in the U.S., but that would add to the shortcoming already built into the budget by that point.
Either way, that chart was published by Obama's administration, and is biased in his favor. That was really all I wanted to point out
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On January 30 2012 09:42 {CC}StealthBlue wrote:This will be Romney's undoing in the General. Show nested quote +TAMPA, FLORIDA — According to some final spending numbers shared with TPM by a Democratic media observer, Mitt Romney’s lucky number in the final push to the Jan. 31 primary here is five.
As in five-to-one: that’s the ratio — just about — by which Romney and his allies have outspent Newt Gingrich and his allies on TV in the Sunshine State. The narrative that Team Romney is pushing is that of a new-and-improved candidate, battle-hardened after his South Carolina woes, and sharpened as a candidate by having had to outsmart Newt Gingrich.
The Dems think these figures suggest something else: that it’s not Romney who’s winning votes in Florida, but the size of his wallet.
According to my Democratic source, the total ad spending through Tuesday in Florida by the Romney campaign and its allied super PAC, Restore Our Future, is $15,340,000. The total spending for Gingrich’s campaign and his super PAC, Winning Our Future, is $3,390,000. Source
From what I've read from sources like the Washington Post, you have to remember that Romney has had a lot of fund raising from the beginning, whereas Gingrich has had a lot of coverage of how he doesn't have much money at all. Romney has a large number of supporters that are donating to his campaign or paying for ads, but Gingrich has this one rich guy from Nevada(?) who funded 10 million dollars.
Also, Romney's spending accounts for ads since December (I was home for Christmas in Florida, and I saw a couple of Romney ads on TV), but all of Gingrich's spending has been in the last few days alone.
Also, if you look at the New York Times, Romney's money that he's raised is much higher than the other candidates (in September, was the first thing I found on Google), but Obama already had more than three times as much raised from donors...and if you look at previous campaign budgets, Obama and Clinton both had over 80 million dollars in 2007 by the time that Romney had 32.6 million in this campaign season.
I'm of the opinion that we're just making a big deal out of it right now, but it's something that happens in every campaign for the presidency...we just tend to forget how much people accumulate and spend.
EDIT: "Romney, meanwhile, has spent $6,723,288 and the pro-Romney super PAC Restore Our Future has spent $8,815,227" (from the Washington Post blog linked above)
Really, if he has anything over 50 or 60 million dollars (which is by no means unimaginable, given the NYT source above), I think 10-15% or less of your campaign funds in order to effectively seal the deal for the nomination isn't unreasonable at all, especially given that you're bound to get even more campaign money after winning the Republican nomination.
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On January 30 2012 11:23 Mordanis wrote:Show nested quote +On January 30 2012 10:42 Mindcrime wrote:On January 30 2012 10:07 liberal wrote:
Actually, I'm still trying to decide in my mind who is worse, Bush or Obama. Bush was an obvious moron and a warmonger, Obama skyrocketed US debt and pushed the wrong health care reform. That... not so much. + Show Spoiler + Thats also 3 years in office vs. 8 years in office, so it isn't quite as onesided as the chart would suggest. I do agree that Bush was a terrible president for the economy. EDIT: I forgot about various unfunded liabilities being much higher for Obama's term than Bush's, but we haven't actually spent those dollars yet, so hypothetically we could cut some amount of those.
That graphic is misleading. Totally exlcudes the stimulus he pushed for, and a lot of other expenditures. Obama has ALREADY out spent Bush, and thats in his first term.
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On January 30 2012 19:28 LiquidSlick wrote:Show nested quote +On January 30 2012 11:23 Mordanis wrote:On January 30 2012 10:42 Mindcrime wrote:On January 30 2012 10:07 liberal wrote:
Actually, I'm still trying to decide in my mind who is worse, Bush or Obama. Bush was an obvious moron and a warmonger, Obama skyrocketed US debt and pushed the wrong health care reform. That... not so much. + Show Spoiler + Thats also 3 years in office vs. 8 years in office, so it isn't quite as onesided as the chart would suggest. I do agree that Bush was a terrible president for the economy. EDIT: I forgot about various unfunded liabilities being much higher for Obama's term than Bush's, but we haven't actually spent those dollars yet, so hypothetically we could cut some amount of those. That graphic is misleading. Totally exlcudes the stimulus he pushed for, and a lot of other expenditures. Obama has ALREADY out spent Bush, and thats in his first term.
No he hasn't. The stimulus is listed, under the name "recovery act". Did you even read the chart?
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On January 30 2012 07:42 Hider wrote:Show nested quote +On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there).
What matters is that what you assume has no resemblance to reality, so your example cannot be taken seriously.
There are idle resources and you imply that it is better that they stay idle instead of letting the government pay them to build a bridge. Thus your argument is that unemployment is good, i.e. it's better that some people do nothing for society, than it is for them to contribute to society.
Your argument hinges on the fact that if the government did nothing, the system would move to the "optimal" 500-500 split. But that isn't what would happen in reality. In reality, the crash that led to people being fired in the haircut sector would create a vicious cycle of falling employment, which causes falling demand, which causes falling employment, and so on. The 500-500 split that you assumed where supply equals demand at the start no longer applies, because demand is not the same, demand has fallen. And without government intervention, there will either be no recovery or a very slow recovery.
You also assume that if the government did nothing, the economy would move to the 500-500 split, i.e. employment in the haircut sector would fall, and unemployment in the other sector would rise. This is not how the real world works. This is empirically false, and it shows how divorced from reality your example is. In a real recession, in the real world, employment falls in essentially every sector. Workers are not transferred from a suboptimal allocation to a more optical one, they are simply fired.
The point of fiscal policy is to get idle workers to do work. Not to reach some abstract and imaginary 500-500 equilibrium that you concocted. There is nothing to suggest that the free market would magically hit the optimal way to allocate resources in an economy during a recession, in fact what is more likely to happen is that the negative feedback loop would reinforce and the downward spiral towards mass unemployment would continue.
Furthermore, you have made a strawman argument against fiscal policy. Even if the economy is most efficient with a particular yet unknowable distribution of workers in each sector, analogous to the 500-500 split, there is no reason why government stimulus can't be targeted towards moving to this point more quickly. In your example, this could include the government investing in the machine making industry to give them more capacity, so that they can hire more workers, and to subsidize their pay in order to attract people from the haircutting industry to move over more quickly. In the real world, this would be analogous to the examples I gave in the above post, the government investing in areas that would better society, things that we need more of: teachers, clean energy, better and upgraded infrastructure, research, etc. To suggest that it's better for people to stay unemployed and useless to society, than it is for them to help build a bridge, is utterly absurd. To add to this, there has never been a better time for the government to invest, because interest rates are at record lows. If the government decided to invest when the economy is better and the debt is much lower, then it would be far more expensive for them, and it would reinforce the business cycle, the opposite of what government spending should be, i.e. countercyclical.
The problem with Austrian economics is that it rejects empiricism and it rejects the scientific method (http://en.wikipedia.org/wiki/Austrian_School), no wonder your example has no basis in reality. No wonder Austrian economics is on the fringe of economics academia. In fact, it flies in the face of a century of real economic observations.
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On January 30 2012 07:55 AcuWill wrote:Show nested quote +On January 30 2012 07:47 SerpentFlame wrote:On January 30 2012 07:42 Hider wrote:On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there). You are definitely confusing microeconomics with macroeconomics. Fiscal policy is counterproductive on the microeconomic scale. Nobody disputes this. Now when society has too many haircutters not because people don't want haircuts, but because they're too poor to buy haircuts because they don't have jobs that they otherwise would have outside a slump, it makes perfect sense to fiscally stimulate both the haircut industry and the jobs of people who would buy haircuts. The people to go into the industry come out of hte unemployed. There will be fewer people for the machine sector to hire. So? Suppose the machine sector hires 1 person per month and 500 are unemployed. Then if the haircut sector hires 3 per month, you have a net job increase even if the machine sector stops hiring at all. The more likely secnario is that the machine sector still has a pool of 497 to draw from and will still hire if there's an opportunity. As for whether government can help get out of a slump, the answer is a resounding yes. The US government pumped so much aggregate demand that it turned into a near-command economy in the Second World War, and the Great Depression ended. It is not a matter of debate that government demand can end depressions. The better question is how (and how much). The concept that the US government ended the Great Depression has been debunked time and again. Actually, if you look into it, you will find that the Depression was extended by the government intercession.
http://en.wikipedia.org/wiki/History_of_the_United_States_public_debt
![[image loading]](http://upload.wikimedia.org/wikipedia/commons/d/d5/US_Federal_Debt.png)
And here's the text accompanying it:
Social programs enacted during the Great Depression and the buildup and involvement in World War II during the F.D. Roosevelt and Truman presidencies in the 1930s and 1940s caused the largest increase – a sixteenfold increase in the gross public debt from $16 billion in 1930 to $260 billion in 1950. When Roosevelt took office in 1933, the national debt was almost $20 billion; a sum equal to 20 percent of the U.S. gross domestic product (GDP). During its first term, the Roosevelt administration ran large annual deficits between 2 and 5 percent of GDP. By 1936, the national debt had increased to $33.7 billion or approximately 40 percent of GDP.[2] Gross debt relative to GDP rose to over 100% of GDP to pay for the mobilization before and during World War II.
The debt burden fell rapidly after the end of World War II, as the US and the rest of the world experienced a post-war economic expansion. However, growth rates in the western countries began to slow in the mid-1960's.
That's the biggest government stimulus in the history of the world.
That's the largest debt level that the US has ever had, yet it didn't burden future generations with debt so high they couldn't pay back. Instead, it coincided with a massive increase in GDP and living standards.
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On January 30 2012 19:28 LiquidSlick wrote:Show nested quote +On January 30 2012 11:23 Mordanis wrote:On January 30 2012 10:42 Mindcrime wrote:On January 30 2012 10:07 liberal wrote:
Actually, I'm still trying to decide in my mind who is worse, Bush or Obama. Bush was an obvious moron and a warmonger, Obama skyrocketed US debt and pushed the wrong health care reform. That... not so much. + Show Spoiler + Thats also 3 years in office vs. 8 years in office, so it isn't quite as onesided as the chart would suggest. I do agree that Bush was a terrible president for the economy. EDIT: I forgot about various unfunded liabilities being much higher for Obama's term than Bush's, but we haven't actually spent those dollars yet, so hypothetically we could cut some amount of those. That graphic is misleading. Totally exlcudes the stimulus he pushed for, and a lot of other expenditures. Obama has ALREADY out spent Bush, and thats in his first term.
http://www.nytimes.com/2011/07/24/opinion/sunday/24sun4.html?_r=1
![[image loading]](http://graphics8.nytimes.com/images/2011/07/24/opinion/sunday/24editorial_graph1/24editorial_graph1-popup.gif)
Bush blew an indefinite surplus with a massive deficit.
As you can see, the deficit was projected to increase if Obama had done nothing, based on the Bush tax cuts and the recession alone. The amount Obama added to the deficit through the stimulus package was temporary and small, as shown.
It's not Obama's fault that Bush gave him an increasing deficit and the worse financial crisis since the great depression.
The deficit would still have almost tripled if Obama didn't spend a cent.
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On January 30 2012 22:04 paralleluniverse wrote:Show nested quote +On January 30 2012 07:42 Hider wrote:On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there). What matters is that what you assume has no resemblance to reality, so your example cannot be taken seriously. There are idle resources and you imply that it is better that they stay idle instead of letting the government pay them to build a bridge. Thus your argument is that unemployment is good, i.e. it's better that some people do nothing for society, than it is for them to contribute to society. Your argument hinges on the fact that if the government did nothing, the system would move to the "optimal" 500-500 split. But that isn't what would happen in reality. In reality, the crash that led to people being fired in the haircut sector would create a vicious cycle of falling employment, which causes falling demand, which causes falling employment, and so on. The 500-500 split that you assumed where supply equals demand at the start no longer applies, because demand is not the same, demand has fallen. And without government intervention, there will either be no recovery or a very slow recovery. You also assume that if the government did nothing, the economy would move to the 500-500 split, i.e. employment in the haircut sector would fall, and unemployment in the other sector would rise. This is not how the real world works. This is empirically false, and it shows how divorced from reality your example is. In a real recession, in the real world, employment falls in essentially every sector. Workers are not transferred from a suboptimal allocation to a more optical one, they are simply fired. The point of fiscal policy is to get idle workers to do work. Not to reach some abstract and imaginary 500-500 equilibrium that you concocted. There is nothing to suggest that the free market would magically hit the optimal way to allocate resources in an economy during a recession, in fact what is more likely to happen is that the negative feedback loop would reinforce and the downward spiral towards mass unemployment would continue. Furthermore, you have made a strawman argument against fiscal policy. Even if the economy is most efficient with a particular yet unknowable distribution of workers in each sector, analogous to the 500-500 split, there is no reason why government stimulus can't be targeted towards moving to this point more quickly. In your example, this could include the government investing in the machine making industry to give them more capacity, so that they can hire more workers, and to subsidize their pay in order to attract people from the haircutting industry to move over more quickly. In the real world, this would be analogous to the examples I gave in the above post, the government investing in areas that would better society, things that we need more of: teachers, clean energy, better and upgraded infrastructure, research, etc. To suggest that it's better for people to stay unemployed and useless to society, than it is for them to help build a bridge, is utterly absurd. To add to this, there is never been a better time for the government to invest, because interest rates are at record lows. If the government decided to invest when the economy is better and the debt is much lower, then it would be far more expensive for them, and it would reinforce the business cycle, the opposite of what government spending should be, i.e. countercyclical. The problem with Austrian economics is that it rejects empiricism and it rejects the scientific method (http://en.wikipedia.org/wiki/Austrian_School), no wonder your example has no basis in reality. No wonder Austrian economics is on the fringe of economics academia. In fact, it flies in the face of a century of real economic observations.
Before I answer your post, I would like to see how you can disprove the austrian schools theory based on empiric evidence. I mean in the last century has there ever been a period where a government led the free market try to work things out?
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On January 30 2012 22:29 Hider wrote:Show nested quote +On January 30 2012 22:04 paralleluniverse wrote:On January 30 2012 07:42 Hider wrote:On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there). What matters is that what you assume has no resemblance to reality, so your example cannot be taken seriously. There are idle resources and you imply that it is better that they stay idle instead of letting the government pay them to build a bridge. Thus your argument is that unemployment is good, i.e. it's better that some people do nothing for society, than it is for them to contribute to society. Your argument hinges on the fact that if the government did nothing, the system would move to the "optimal" 500-500 split. But that isn't what would happen in reality. In reality, the crash that led to people being fired in the haircut sector would create a vicious cycle of falling employment, which causes falling demand, which causes falling employment, and so on. The 500-500 split that you assumed where supply equals demand at the start no longer applies, because demand is not the same, demand has fallen. And without government intervention, there will either be no recovery or a very slow recovery. You also assume that if the government did nothing, the economy would move to the 500-500 split, i.e. employment in the haircut sector would fall, and unemployment in the other sector would rise. This is not how the real world works. This is empirically false, and it shows how divorced from reality your example is. In a real recession, in the real world, employment falls in essentially every sector. Workers are not transferred from a suboptimal allocation to a more optical one, they are simply fired. The point of fiscal policy is to get idle workers to do work. Not to reach some abstract and imaginary 500-500 equilibrium that you concocted. There is nothing to suggest that the free market would magically hit the optimal way to allocate resources in an economy during a recession, in fact what is more likely to happen is that the negative feedback loop would reinforce and the downward spiral towards mass unemployment would continue. Furthermore, you have made a strawman argument against fiscal policy. Even if the economy is most efficient with a particular yet unknowable distribution of workers in each sector, analogous to the 500-500 split, there is no reason why government stimulus can't be targeted towards moving to this point more quickly. In your example, this could include the government investing in the machine making industry to give them more capacity, so that they can hire more workers, and to subsidize their pay in order to attract people from the haircutting industry to move over more quickly. In the real world, this would be analogous to the examples I gave in the above post, the government investing in areas that would better society, things that we need more of: teachers, clean energy, better and upgraded infrastructure, research, etc. To suggest that it's better for people to stay unemployed and useless to society, than it is for them to help build a bridge, is utterly absurd. To add to this, there is never been a better time for the government to invest, because interest rates are at record lows. If the government decided to invest when the economy is better and the debt is much lower, then it would be far more expensive for them, and it would reinforce the business cycle, the opposite of what government spending should be, i.e. countercyclical. The problem with Austrian economics is that it rejects empiricism and it rejects the scientific method (http://en.wikipedia.org/wiki/Austrian_School), no wonder your example has no basis in reality. No wonder Austrian economics is on the fringe of economics academia. In fact, it flies in the face of a century of real economic observations. Before I answer your post, I would like to see how you can disprove the austrian schools theory based on empiric evidence. I mean in the last century has there ever been a period where a government led the free market try to work things out?
Probably not. But doesn't the free market want to take power of the government so it can succeed? If it has the chance it will take it every time, and there hasn't been much in the way of barring corporate influence in government. Ironically the only way it can be a free market is if there are government regulations that fight corporate take-overs in politics.
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On January 30 2012 22:29 Hider wrote:Show nested quote +On January 30 2012 22:04 paralleluniverse wrote:On January 30 2012 07:42 Hider wrote:On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there). What matters is that what you assume has no resemblance to reality, so your example cannot be taken seriously. There are idle resources and you imply that it is better that they stay idle instead of letting the government pay them to build a bridge. Thus your argument is that unemployment is good, i.e. it's better that some people do nothing for society, than it is for them to contribute to society. Your argument hinges on the fact that if the government did nothing, the system would move to the "optimal" 500-500 split. But that isn't what would happen in reality. In reality, the crash that led to people being fired in the haircut sector would create a vicious cycle of falling employment, which causes falling demand, which causes falling employment, and so on. The 500-500 split that you assumed where supply equals demand at the start no longer applies, because demand is not the same, demand has fallen. And without government intervention, there will either be no recovery or a very slow recovery. You also assume that if the government did nothing, the economy would move to the 500-500 split, i.e. employment in the haircut sector would fall, and unemployment in the other sector would rise. This is not how the real world works. This is empirically false, and it shows how divorced from reality your example is. In a real recession, in the real world, employment falls in essentially every sector. Workers are not transferred from a suboptimal allocation to a more optical one, they are simply fired. The point of fiscal policy is to get idle workers to do work. Not to reach some abstract and imaginary 500-500 equilibrium that you concocted. There is nothing to suggest that the free market would magically hit the optimal way to allocate resources in an economy during a recession, in fact what is more likely to happen is that the negative feedback loop would reinforce and the downward spiral towards mass unemployment would continue. Furthermore, you have made a strawman argument against fiscal policy. Even if the economy is most efficient with a particular yet unknowable distribution of workers in each sector, analogous to the 500-500 split, there is no reason why government stimulus can't be targeted towards moving to this point more quickly. In your example, this could include the government investing in the machine making industry to give them more capacity, so that they can hire more workers, and to subsidize their pay in order to attract people from the haircutting industry to move over more quickly. In the real world, this would be analogous to the examples I gave in the above post, the government investing in areas that would better society, things that we need more of: teachers, clean energy, better and upgraded infrastructure, research, etc. To suggest that it's better for people to stay unemployed and useless to society, than it is for them to help build a bridge, is utterly absurd. To add to this, there is never been a better time for the government to invest, because interest rates are at record lows. If the government decided to invest when the economy is better and the debt is much lower, then it would be far more expensive for them, and it would reinforce the business cycle, the opposite of what government spending should be, i.e. countercyclical. The problem with Austrian economics is that it rejects empiricism and it rejects the scientific method (http://en.wikipedia.org/wiki/Austrian_School), no wonder your example has no basis in reality. No wonder Austrian economics is on the fringe of economics academia. In fact, it flies in the face of a century of real economic observations. Before I answer your post, I would like to see how you can disprove the austrian schools theory based on empiric evidence. I mean in the last century has there ever been a period where a government led the free market try to work things out?
Austrians advocate cutting government spending.
That's working great for Europe...
While not exactly a free market, that's Austrian economics empirically failing.
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On January 30 2012 22:38 paralleluniverse wrote:Show nested quote +On January 30 2012 22:29 Hider wrote:On January 30 2012 22:04 paralleluniverse wrote:On January 30 2012 07:42 Hider wrote:On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there). What matters is that what you assume has no resemblance to reality, so your example cannot be taken seriously. There are idle resources and you imply that it is better that they stay idle instead of letting the government pay them to build a bridge. Thus your argument is that unemployment is good, i.e. it's better that some people do nothing for society, than it is for them to contribute to society. Your argument hinges on the fact that if the government did nothing, the system would move to the "optimal" 500-500 split. But that isn't what would happen in reality. In reality, the crash that led to people being fired in the haircut sector would create a vicious cycle of falling employment, which causes falling demand, which causes falling employment, and so on. The 500-500 split that you assumed where supply equals demand at the start no longer applies, because demand is not the same, demand has fallen. And without government intervention, there will either be no recovery or a very slow recovery. You also assume that if the government did nothing, the economy would move to the 500-500 split, i.e. employment in the haircut sector would fall, and unemployment in the other sector would rise. This is not how the real world works. This is empirically false, and it shows how divorced from reality your example is. In a real recession, in the real world, employment falls in essentially every sector. Workers are not transferred from a suboptimal allocation to a more optical one, they are simply fired. The point of fiscal policy is to get idle workers to do work. Not to reach some abstract and imaginary 500-500 equilibrium that you concocted. There is nothing to suggest that the free market would magically hit the optimal way to allocate resources in an economy during a recession, in fact what is more likely to happen is that the negative feedback loop would reinforce and the downward spiral towards mass unemployment would continue. Furthermore, you have made a strawman argument against fiscal policy. Even if the economy is most efficient with a particular yet unknowable distribution of workers in each sector, analogous to the 500-500 split, there is no reason why government stimulus can't be targeted towards moving to this point more quickly. In your example, this could include the government investing in the machine making industry to give them more capacity, so that they can hire more workers, and to subsidize their pay in order to attract people from the haircutting industry to move over more quickly. In the real world, this would be analogous to the examples I gave in the above post, the government investing in areas that would better society, things that we need more of: teachers, clean energy, better and upgraded infrastructure, research, etc. To suggest that it's better for people to stay unemployed and useless to society, than it is for them to help build a bridge, is utterly absurd. To add to this, there is never been a better time for the government to invest, because interest rates are at record lows. If the government decided to invest when the economy is better and the debt is much lower, then it would be far more expensive for them, and it would reinforce the business cycle, the opposite of what government spending should be, i.e. countercyclical. The problem with Austrian economics is that it rejects empiricism and it rejects the scientific method (http://en.wikipedia.org/wiki/Austrian_School), no wonder your example has no basis in reality. No wonder Austrian economics is on the fringe of economics academia. In fact, it flies in the face of a century of real economic observations. Before I answer your post, I would like to see how you can disprove the austrian schools theory based on empiric evidence. I mean in the last century has there ever been a period where a government led the free market try to work things out? Austrians advocate cutting government spending. That's working great for Europe... While not exactly a free market, that's Austrian economics empirically failing.
Ye but now he'll say that the reason europe is in the crisis in the first place is because they didn't follow Austrian economics. The entire 'theory' is close to a cult, entirely based in faith, and trying to debate it is just as useless. Any empirical evidence gets discredited on the basis of 'markets were not free enough' and any problems that arise from deregulation are the results of whatever government interference is left.
We should all stop debating it, this entire thread is being consumed by the economic ideas of a candidate that's irrelevant in the nominating process by now.
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On January 30 2012 22:43 Derez wrote:Show nested quote +On January 30 2012 22:38 paralleluniverse wrote:On January 30 2012 22:29 Hider wrote:On January 30 2012 22:04 paralleluniverse wrote:On January 30 2012 07:42 Hider wrote:On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there). What matters is that what you assume has no resemblance to reality, so your example cannot be taken seriously. There are idle resources and you imply that it is better that they stay idle instead of letting the government pay them to build a bridge. Thus your argument is that unemployment is good, i.e. it's better that some people do nothing for society, than it is for them to contribute to society. Your argument hinges on the fact that if the government did nothing, the system would move to the "optimal" 500-500 split. But that isn't what would happen in reality. In reality, the crash that led to people being fired in the haircut sector would create a vicious cycle of falling employment, which causes falling demand, which causes falling employment, and so on. The 500-500 split that you assumed where supply equals demand at the start no longer applies, because demand is not the same, demand has fallen. And without government intervention, there will either be no recovery or a very slow recovery. You also assume that if the government did nothing, the economy would move to the 500-500 split, i.e. employment in the haircut sector would fall, and unemployment in the other sector would rise. This is not how the real world works. This is empirically false, and it shows how divorced from reality your example is. In a real recession, in the real world, employment falls in essentially every sector. Workers are not transferred from a suboptimal allocation to a more optical one, they are simply fired. The point of fiscal policy is to get idle workers to do work. Not to reach some abstract and imaginary 500-500 equilibrium that you concocted. There is nothing to suggest that the free market would magically hit the optimal way to allocate resources in an economy during a recession, in fact what is more likely to happen is that the negative feedback loop would reinforce and the downward spiral towards mass unemployment would continue. Furthermore, you have made a strawman argument against fiscal policy. Even if the economy is most efficient with a particular yet unknowable distribution of workers in each sector, analogous to the 500-500 split, there is no reason why government stimulus can't be targeted towards moving to this point more quickly. In your example, this could include the government investing in the machine making industry to give them more capacity, so that they can hire more workers, and to subsidize their pay in order to attract people from the haircutting industry to move over more quickly. In the real world, this would be analogous to the examples I gave in the above post, the government investing in areas that would better society, things that we need more of: teachers, clean energy, better and upgraded infrastructure, research, etc. To suggest that it's better for people to stay unemployed and useless to society, than it is for them to help build a bridge, is utterly absurd. To add to this, there is never been a better time for the government to invest, because interest rates are at record lows. If the government decided to invest when the economy is better and the debt is much lower, then it would be far more expensive for them, and it would reinforce the business cycle, the opposite of what government spending should be, i.e. countercyclical. The problem with Austrian economics is that it rejects empiricism and it rejects the scientific method (http://en.wikipedia.org/wiki/Austrian_School), no wonder your example has no basis in reality. No wonder Austrian economics is on the fringe of economics academia. In fact, it flies in the face of a century of real economic observations. Before I answer your post, I would like to see how you can disprove the austrian schools theory based on empiric evidence. I mean in the last century has there ever been a period where a government led the free market try to work things out? Austrians advocate cutting government spending. That's working great for Europe... While not exactly a free market, that's Austrian economics empirically failing. Ye but now he'll say that the reason europe is in the crisis in the first place is because they didn't follow Austrian economics. The entire 'theory' is close to a cult, entirely based in faith, and trying to debate it is just as useless. Any empirical evidence gets discredited on the basis of 'markets were not free enough' and any problems that arise from deregulation are the results of whatever government interference is left. We should all stop debating it, this entire thread is being consumed by the economic ideas of a candidate that's irrelevant in the nominating process by now.
If their policies only work in an economy that doesn't exist in reality, then what are they good for?
Economic voodoo.
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paralleluniverse, thank you for posting in this thread.
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On January 30 2012 22:38 paralleluniverse wrote:Show nested quote +On January 30 2012 22:29 Hider wrote:On January 30 2012 22:04 paralleluniverse wrote:On January 30 2012 07:42 Hider wrote:On January 30 2012 07:23 paralleluniverse wrote:On January 29 2012 23:02 Hider wrote:
Paraleluniverse:
"Jobs create by stimulus has more value than no jobs at all.
I honestly don't understand why you keep repeating this, as you haven't even tried dismiss the problem of "aggregate sizes". Some how you still think 900 haircutters creates wealth, when the society only needs 500. Your example is completely divorced from reality. In reality, the government can borrow at negative real interest rates (i.e. inflation is higher than the rate government needs to repay on debt). In reality, there is idle resources, people sitting around doing nothing and wanting to work. Society needs less teachers? Less investments in infrastructure? Less investments in research? Less manufacturing? You're argument is that unemployment is good, and that it's good for the economy that resources are not put to use. Glad for your answer: 1) The rate of interest rates doesn't make the example unrealistic (you can assume that government could borrow money for free to make the fiscal policiy. Wouldn't really change the point I am trying to make with the problem of aggregate numbers. 2) I actually assumed there were idle ressoruces (50 people unemployed in my example. 25 of them got a job becasue of fiscal policy). 3) I only used 2 different industries to make the example less complicated. Adding 10 more industrys wouldn't change the principle. Too many people still work in the haircut industry and need to be fired and then employed to the other industries before the economy gets healthy. 4) As I somehwat understand your logic you agree with me that the ratio needs to be 500/500 (agree?), but your convinced that fiscal policiy makes more people be employed in the machine industry. But how? Where do these people come from? According to my logic they should come from the haircut industry (where they get fired). Where should they come from according to your logic? (The unemployed?). But if they are to build this bridge, obv. there will be less people for the machine sector ti hire. And because aggregate spendings increases (compared to if there were 0 fiscal policies) the haircut indsutry can afford to slow down the "firing rate" (agree?). And this means (according to my logic), that it will take more time before we get to the 500/500 ratio, and until then the economy will never be healthy. It will be in a constant recession (or perhaps it will just has indebted it self before we get there). What matters is that what you assume has no resemblance to reality, so your example cannot be taken seriously. There are idle resources and you imply that it is better that they stay idle instead of letting the government pay them to build a bridge. Thus your argument is that unemployment is good, i.e. it's better that some people do nothing for society, than it is for them to contribute to society. Your argument hinges on the fact that if the government did nothing, the system would move to the "optimal" 500-500 split. But that isn't what would happen in reality. In reality, the crash that led to people being fired in the haircut sector would create a vicious cycle of falling employment, which causes falling demand, which causes falling employment, and so on. The 500-500 split that you assumed where supply equals demand at the start no longer applies, because demand is not the same, demand has fallen. And without government intervention, there will either be no recovery or a very slow recovery. You also assume that if the government did nothing, the economy would move to the 500-500 split, i.e. employment in the haircut sector would fall, and unemployment in the other sector would rise. This is not how the real world works. This is empirically false, and it shows how divorced from reality your example is. In a real recession, in the real world, employment falls in essentially every sector. Workers are not transferred from a suboptimal allocation to a more optical one, they are simply fired. The point of fiscal policy is to get idle workers to do work. Not to reach some abstract and imaginary 500-500 equilibrium that you concocted. There is nothing to suggest that the free market would magically hit the optimal way to allocate resources in an economy during a recession, in fact what is more likely to happen is that the negative feedback loop would reinforce and the downward spiral towards mass unemployment would continue. Furthermore, you have made a strawman argument against fiscal policy. Even if the economy is most efficient with a particular yet unknowable distribution of workers in each sector, analogous to the 500-500 split, there is no reason why government stimulus can't be targeted towards moving to this point more quickly. In your example, this could include the government investing in the machine making industry to give them more capacity, so that they can hire more workers, and to subsidize their pay in order to attract people from the haircutting industry to move over more quickly. In the real world, this would be analogous to the examples I gave in the above post, the government investing in areas that would better society, things that we need more of: teachers, clean energy, better and upgraded infrastructure, research, etc. To suggest that it's better for people to stay unemployed and useless to society, than it is for them to help build a bridge, is utterly absurd. To add to this, there is never been a better time for the government to invest, because interest rates are at record lows. If the government decided to invest when the economy is better and the debt is much lower, then it would be far more expensive for them, and it would reinforce the business cycle, the opposite of what government spending should be, i.e. countercyclical. The problem with Austrian economics is that it rejects empiricism and it rejects the scientific method (http://en.wikipedia.org/wiki/Austrian_School), no wonder your example has no basis in reality. No wonder Austrian economics is on the fringe of economics academia. In fact, it flies in the face of a century of real economic observations. Before I answer your post, I would like to see how you can disprove the austrian schools theory based on empiric evidence. I mean in the last century has there ever been a period where a government led the free market try to work things out? Austrians advocate cutting government spending. That's working great for Europe... While not exactly a free market, that's Austrian economics empirically failing.
Oh no. Europe =/ free market. Any austrian economist is definitely not a fan of how EU is handling the crises. Whether its worse or better than how US handles it, is another discussion.
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EPT![[image loading]](http://cdn.theatlantic.com/static/mt/assets/jamesfallows/debt_chart_wh_0.jpg)
