This is irrelevant when banks aren't lending. I'm actually not sure how these numbers are related, but there is plenty of evidence that companies are having tremendous difficulty rolling over debt. Drying up credit can also be caused by pessimistic short term expectations that have nothing to do with the fundamentals of the economy. People do not invest according to the productive capacity of an economy, but on its actual rate of production. It seems to me that supply side theories largely dismiss the psychological factor. In fact, what the US is suffering from right now is a self-fulfilling speculative attack whose effects are very real, even if the basis of its growth has been largely unaffected. The market can't be counted on to recover on its own because these expectations seem to usher in a new mindset that functionally lowers the equilibrium point. So long as these expectations persist, credit will remain slow. Savings are useless if banks aren't willing to lend in the first place. While I believe such a policy is appropriate where business confidence is high and the only restriction to growth is limited capital, in this instance, a resurgence in demand must occur first if we want to move those savings where it's needed most.
There is a psychological side to the market, but it was invested in all the undue optimism of the past few decades. Short-term expectations are of greater consequence in a bull market than a bear market, due to our natural tendency to avoid thinking about bad things, rather than avoiding hope. It was this psychological bubble that maintained housing and stock prices, which was itself in turn caused by easy money and overlending.
You want investors and lenders to be seized with a certain sense of caution, and fear of the consequences of bad decisions. This is incidentally one area where no natural check is placed on government spending and investment. The money the government invests is simply taken out of the hands of individual investors, with the added handicap of a distorted benefit-cost assessment, lobbyist influence and lack of legal checks against corruption and waste.
Maintaining an unrestricted credit flow when the natural mechanisms of overpriced markets force them to contract has the consequence of propping up the bubbles which cannot be maintained in the first price. We want credit to dry up, so prices can come down, unprofitable enterprises forced into bankrupcy and resources freed up for new investsments.
If you think that the American economy has sufficient productive capacity to make long-term profits on psychologically-induced low prices, then get yourself a broker and buy up all these underpriced assets. If you've figured out something that the market hasn't, take advantage of it and get rich. Otherwise, the value isn't there.
On January 28 2009 02:48 Jibba wrote: It's not just 5+ million jobs you're sacrificing, it's decades worth of prosperity for the sake of a liberalism ideal. This isn't Atlas Shrugged.
It's a problem that the money is held elsewhere because they can simply leave the market when it becomes too costly. When Japanese heavy industries start to fail (which they are, Nippon Steel just announced a massive production decrease) the companies will begin to contract and they won't be contracting towards the US. Free market? Yes, but the free market is a theory that isn't executed anywhere. Not in the US and not in Japan. Toyota and Honda offer excellent cars at an extremely competitive price in the US, meanwhile non-Japanese cars face enormous premiums on Nippon. Senators in Kentucky and Alabama hate the bailout because they want Toyota to do well in their states, but they don't realize they're going to get fucked if those companies go down as well.
Ford and GM go down -> Most domestic suppliers go out of business -> Toyota/Honda face massive supply shortage, and either cut production further (cutting more jobs) or start importing parts -> supply importation drives prices up and sales to go down, which means they'll halt expansion and probably remove domestic production since they'd be importing so many of the parts anyways, and it makes more sense to just import the car.
Plants that make diesel trucks are already starting to close, Honda just announced it's cutting production in US/Japan, Toyota is about to start cutting jobs in the US/Britain, Mitsubishi is suspending its plants in Illinois.
No prosperity is being sacrificed, it's for the good of the economy and of society as a whole for government (i.e the taxpayer) to not bail out these companies. Yes jobs will be lost and that's unfortunate, but their jobs are being cut for a reason. People don't want to buy cars right now; it isn't fair to force people to prop up failing companies. Bailing them out won't increase demand for cars, it just allows unproductive companies to leech off society when society is demonstrating through consumer choice that they don't want to buy from these businesses.
It's no different than when a restaurant goes out of business. If a restaurant is failing should the government bail them out? Afterall, if it goes under then everyone who worked there will lose their job. And of course no one likes to see people lose their jobs, but the restaurant is going out of business because people don't want to eat there. It doesn't make any moral or economic sense to take money from people so that this restaurant which is losing money can stay in business.
You might argue that a big company like Ford or GM going under would be alot more devastating to the economy since so many jobs are at stake, but economic principles do not change based on numbers.
Failing business are the consumers way of saying that the resources invested in such a business could be more effeciently allocated elsewhere.
I largely agree with you but I do think we have to seriously consider the short term cost of letting the Big 3 fail. The social safety net in America just isn't very effective. For many of the employees at these companies, retraining just isn't an option. And while in America it's comparatively easier to move from an economically depressed area like Michigan to somewhere more prosperous, this isn't an option for many due to economic and personal reasons. If we're going to just allow industries this size to collapse, it's important to bolster our ability to assist the unemployed in finding new jobs.
I understand that many jobs will be lost, but they are being lost for a reason. The companies these people are employed at are no longer profitable and should be liquidated. It's unfortunate that some people get hurt in the process but we don't live in a world of infinite resources. We live in a world of scarcity and if resources are to be invested in productive sectors of society, they must be taken from somewhere else. As another poster mentioned somehwere, competition works precisely *because* failing business models are allowed to sink.
The presumption underlying this argument is that it is impossible for American car companies to compete.
I don't assume this, and I don't see the relevance of this.
The reason they are doing so badly is because they were making fuel guzzling cars and all of a sudden, almost overnight demand for their product collapsed back when oil was at incredible highs. This coupled with the fundamental weakness of the American economy which is certainly the most important market for American made cars has put the car companies suddenly in terrible trouble.
They saw the change in demand patterns for cars but they were reacting not preempting but reactionary so now they have come up with good fuel efficient and electric cars but there is no demand in the current economic environment for this and whats more the price of oil has dropped.
The reason for their failing is irrelevant. Regardless of the cause, these companies are now in a position where they are spending alot more money (in wages and other factors of production) than they are making. Consumers are not willing to spend the money right now that it takes to keep these companies afloat, and understandably so. Forcing consumers to fork over cash to these companies is not a stable solution and will prolong the recession.
Basically they got unlucky, you help them out now and I see every prospect that they will do well in the future.
Not anytime soon. Given the state of the economy it's likely to be a while before people start buying cars again at a rate that can sustain these companies at their current size. Taking money out of peoples pockets to give to the big manufacturers won't increase demand for cars (Despite the Keynesian gospel that's infiltrated every Macro 101 textbook, creating money out of thin air does NOT "stimulate the economy" in any productive way).
But more importantly, if people believe that these companies can pull through, let them invest their own money and reap the rewards of the risk they take. It's immoral to take money from other people.
One important reason people have not mentioned is the fact that if you have a war it is very important that you have existing heavy industry so you can rapidly gear up and increase production, it was because of Ford that America had such a huge economy in world war two to a large extent. You simply cannot assume there will not be war, you must be in a position to engage in total war if needed, this consideration outweighs loss of benefit due to protectionist policies around heavy industry.
I don't think that if Ford or GM collapse other countries are gonna try and start shit with the US. We have the strongest military in the world. If we need to create more weapons, there are other companies that can do that, and more can arise if there is enough demand for it.
On January 29 2009 23:00 SmoKing2012 wrote: Ron Paul tells it like it is:
and the pundits are baffled..
Ron Paul is god but this wasnt his best interview, he focused on bashing the mistakes of the past and current administration instead of purposing an interesting solution.
His solution is the same as it's always been. Abolish the Fed, and get the government out of (what should be) the private sector. And this is what none of the pundits are able to wrap their heads around.. their mindset is that Benevolent Government must take an active role to help see us through the situation; what should the government do.. and RP's answer is that they should do nothing. They should GTFO. Government is only exacerbating the problem.
His posture is too defensive like in the final question if he would acept double digits unemployment, he briefly says "better than 20", and then gets into defensive mode "but ask Greenspan what he thinks... bla bla bla".
I mean its good to smear shit over Greenspan and the other douchebags but he shouldnt put all of his speech there imo.
He could've worded that part better, but his point is that this recession was made inevitable by the expansionary monetary policy of Greenspan (from 2001 to 2004 he cut the federal funds rate from 6.5% to 1%). The recessions is the process of society liquidating off poor investments that seemed lucrative while Greenspan was flooding money into the economy. You can try to push the burst back by propping up failing companies, but that will only make the collapse all the more devestating when it finally does happen. The sooner government stops fucking with the money supply, the sooner the economy can recover.
They have been doing a great program on the bbc when evan davis examines the causes of the global economic recession. I advise all English people to check out bbc iplayer! Finally I understand all the sub prime securities and the inter-bank lending problems!
My two cents is that the stock market needs to calm down...illegalise bonuses for investment bankers et al which go past a certain percent p/a of their wage. Ie they are allowed up to 25% of their salary to be paid as a bonus on top of their normal salary.
It's a big feeding frenzy, the stock market. All the brokers and people involved I've ever met were pasty, slightly chubby, really abrupt talkers, always looking slightly distracted; as if every second they were away from what is basically (from what I can see!) an incredibly addictive money-making mmorpg, they were losing money.
As far as the cash stimulus goes, I guess it doesn't seem like a bad idea, but some pundits in England give other viable ways out. Vince Cable, spokesperson for the treasury of the liberal democrats, has a LOT of useful things to say on the matter. At least the liberals are trying to be vocal about ideas, rather than just scoring points in a puerile and deconstructive manner like the Tories.
I wish we had a liberal government, I'm seriously you guys ><, two of the frontbenchers for the lib dems are like economic geniuses.
England is SCARILY badly placed for the recession. 70% of our 31 million person workforce is in finance. Unless England can somehow pull its socks up, bring out a classic stern british mood and get on with working harder than ever; restoring people's confidence in our country, we are properly fucked and will slip and side right into losing our triple A credit rating and dropping off the financial map.
As Friedman himself admitted, he won on the intelectual level but politicians do not apply his policies and approaches in practice.
It would be all nice to let the banks go under and rebuild the banking system with avoiding intervention but its simply not possible in the real world...
On January 30 2009 02:05 LemOn wrote: Liberals in the UK? Oh please
I know I know I know (: Definitely not in England. As a nation there are just way too many dumb hereditary voters who don't give two shits about the issues, but one can still dream, can't one?! Perhaps a coalition government! Maybe, kinda, maybe?! I mean in PMQ's this week you had two questions from labour MPs that sounded like rallying cries for a war-torn Britain lol!
I was sort of neutral about the stimulus before, but now it is becoming apparent that it is not so much an "economic stimulus bill" as it is a "stimulus for the democratic party".
Obama sold this as "building infrastructure" like roads and what not. Instead,
"Another "stimulus" secret is that some $252 billion is for income-transfer payments -- that is, not investments that arguably help everyone, but cash or benefits to individuals for doing nothing at all. There's $81 billion for Medicaid, $36 billion for expanded unemployment benefits, $20 billion for food stamps, and $83 billion for the earned income credit for people who don't pay income tax. While some of that may be justified to help poorer Americans ride out the recession, they aren't job creators."
"In selling the plan, President Obama has said this bill will make "dramatic investments to revive our flagging economy."...[but] Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There's another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities. Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus. And even many of these projects aren't likely to help the economy immediately. As Peter Orszag, the President's new budget director, told Congress a year ago, "even those [public works] that are 'on the shelf' generally cannot be undertaken quickly enough to provide timely stimulus to the economy.""
--http://online.wsj.com/article/SB123310466514522309.html The whole article is worth a read
Non-infrastructure stimulatory spending:
If that isn't a democratic party wish list that they would want to pass any day under any pretext, then I don't know what is.
Whether or not those are worthwhile projects is a different debate. The questions is, is this being done because it is the best way to stimulate the economy like democrats are telling the public, or is it being done because the democrats have a majority and LONG list of pet projects that they haven't been able to pass for 2 decades due to divided government? If they want to fund pet projects, they should be up front about what it is and not use the public's temporary state of fear to pass things that are misleading (especially if it costs a trillion dollars).
It also appears that most of the spending isn't even scheduled to START until 2011? Whats up with that? Who knows what the situation will be like then or what is needed? This might be only a 2 year recession. If that is the case, then it will be too late for the government to "save the economy"
"The Congressional Budget Office estimates that less than one-fifth of the $50 billion of proposed spending on energy and water would occur by the end of 2010. "
And speaking of total spending, only 1/7 will be in 2009 (the only year we KNOW that we will need a stimulus.) I say they should do a year by year stimulus so that you can adjust to what the current needs are as they change. Think of how different things were 1 year ago.
Wish Senate Republicans and moderate democrats luck in stopping this bill.
Ron Paul is god but this wasnt his best interview, he focused on bashing the mistakes of the past and current administration instead of purposing an interesting solution.
His solution is the same as it's always been. Abolish the Fed, and get the government out of (what should be) the private sector. And this is what none of the pundits are able to wrap their heads around.. their mindset is that Benevolent Government must take an active role to help see us through the situation; what should the government do.. and RP's answer is that they should do nothing. They should GTFO. Government is only exacerbating the problem.
His posture is too defensive like in the final question if he would acept double digits unemployment, he briefly says "better than 20", and then gets into defensive mode "but ask Greenspan what he thinks... bla bla bla".
I mean its good to smear shit over Greenspan and the other douchebags but he shouldnt put all of his speech there imo.
He could've worded that part better, but his point is that this recession was made inevitable by the expansionary monetary policy of Greenspan (from 2001 to 2004 he cut the federal funds rate from 6.5% to 1%). The recessions is the process of society liquidating off poor investments that seemed lucrative while Greenspan was flooding money into the economy. You can try to push the burst back by propping up failing companies, but that will only make the collapse all the more devestating when it finally does happen. The sooner government stops fucking with the money supply, the sooner the economy can recover.
Inevitably this thread gets back to this discussion about the Fed. In short, libertarians seem way too easily able to forget history. Compared with before the inception of the Fed and the loss of the "gold standard", the US has spent about half as much of its time in recession and those recessions have been considerably less severe. I wish I could find the statistics and graphs that demonstrate this, but the only ones I have are on paper. Pick up Krugman's "The Return of Depression Economics", for example.
The Fed is not perfect. In this instance, low interest rates were driven by Greenspan's overestimation of the economy's ability to grow and his insistence on lowering unemployment. But lowering interest rates in the short run DID help to mitigate the impact of the 2000/2001 recession. Fucking with the money supply got us out of the Great Depression, and I don't see a "much worse collapse" coming anytime soon.
I fail to see how government is propping up failing companies. Recessions are not necessarily caused by weak fundamentals. In this instance, it has more to do with expectations. We're suffering from a "self-fulfilling speculative attack" of the kind that struck the Asian economies in the 90's. The fear that the economy will sink has actually enabled the economy to sink. This is a recession driven by margin calls. By restoring these companies and stimulating demand, government helps the economy to restore its original equilibrium and end the game of false expectations.
1) Even the Food Stamps and others work as a job creator. If one believes in Keynes's multiplier than allowing poor people spend money on food will itself boost the economy and create more jobs.
2) As Neo Keynesianism is being fully accepted by the goverment than you are right that the stimulus is needed right now to damped the business cycle (and the crisis seems to be nothing else than another cycle recession, however dramatic).
So basically he needs to throw money on the economy. But why not to take this crisis as a reason to do it in a sense that will not only dampen the cycle by creating jobs and stimulating demand, but also as a platform for future development?
Bridges, Roads and other infrastructure are in desolate state in the US, and big investments haven't been done in decades, so although only part of the stimulus will actually be used for the cure of the crisis, it is still great to do that when looking towards the future.
On January 30 2009 03:18 Savio wrote: I was sort of neutral about the stimulus before, but now it is becoming apparent that it is not so much an "economic stimulus bill" as it is a "stimulus for the democratic party".
Obama sold this as "building infrastructure" like roads and what not. Instead,
"Another "stimulus" secret is that some $252 billion is for income-transfer payments -- that is, not investments that arguably help everyone, but cash or benefits to individuals for doing nothing at all. There's $81 billion for Medicaid, $36 billion for expanded unemployment benefits, $20 billion for food stamps, and $83 billion for the earned income credit for people who don't pay income tax. While some of that may be justified to help poorer Americans ride out the recession, they aren't job creators."
investing in your population is obviously investing in the economy especially given the importance of skilled workers. education and healthcare are not "baww the poor are jacking our moneys" projects. they help keep your workforce ready.
besides, the basic point of the economy is to provide a living for people. the govt should look out for the economic future of the lower middle class.
On January 30 2009 05:04 oneofthem wrote: investing in your population is obviously investing in the economy especially given the importance of skilled workers. education and healthcare are not "baww the poor are jacking our moneys" projects. they help keep your workforce ready.
besides, the basic point of the economy is to provide a living for people. the govt should look out for the economic future of the lower middle class.
If the government is trying to look out for the economic future of the lower middle class, they should stop inefficiently spending money now. The money they spend now is at the cost of future growth.
On January 30 2009 03:58 LemOn wrote: 1) Even the Food Stamps and others work as a job creator. If one believes in Keynes's multiplier than allowing poor people spend money on food will itself boost the economy and create more jobs.
The only difference between giving them food stamps and giving them money is that food stamps is a less efficient way of raising someone's well being (unless you are very liberal and think the government knows what each person needs more than he himself does).
If the government is allright with trying to stimulate the economy through transfer payments (as opposed to infrastructure), then they should just give the money directly to the customer. Anything else can be definitively proven to be inneficient (if I had a blackboard handy and you were here, I would draw it out for you. Essentially since the people don't value $1 worth of food stamps at $1 but rather at something lower like 85 cents, you have a deadweight loss of efficiency due to the government deciding what people want rather than people themselves deciding).
I say if we are gonna spend 800 billion dollar, lets just give it straight to people. Give it to them in equal amounts (that is very progressive since the poor people get the same as rich people without having contributed in the first place). $800 billion is roughly $2,666 per PERSON. That includes children and minors. So a family of 4 would get $10,666. Now the people have that money and if they need it for their mortgage, then they use it on that. If they need it to pay off their car so it doesn't get repossessed, they do that. If what they REALLY need is a new computer or whatever it is, they can choose themselves. And THAT would stimulate the economy while giving maximum benefit to each individual since preferences between people and current needs are so different.
Also, I might add that even though the government has given out a stimulus check before and it didn't have very much effect, recall also that they were giving out tiny amounts. My family of 3 got like 300 dollars or somthing like that. That is too small to have a measurable effect.
I say, if we are going to spend 800 billion dollars, then fine, but lets let people maximize their own utility and get the maximum benefit out of it.
Also I hope nobody comes out with the lame argument "we can't give people money and freedom to choose what to spend it on, or they will just buy a bunch of Chinese goods and stimulate China's economy". That is what people who don't understand economics would want to say due to what I call "misguided common sense". It is NOT true that a trade deficit is bad for your economy. This is because every time you buy an import with American $$$$, that money can only be used by them to either:
1. Buy American goods or 2. Invest in American business
Sure you can exchange it for a ruble, but when you zoom out, every dollar has to eventually come back to an economy that uses the dollar. Its not like the money exchangers are printing rubles and burning dollars when they do an exchange.
So, if a country like the US has an overall trade deficit, then we must have an investment surplus, which has been true for a LONG time. Countries with which we have a trade deficit invest a LOT of money into the US which is a good thing because US consumers do not have a very high savings rate meaning our domestic investments are very low. The US has also always been a very good place for investors to invest so they choose to spend the money they got when they sold their goods to us in investments rather than in American goods.
Now, this is gonna confuse some people because the media is always talking about how our "trade deficit" is growing and that is a "bad thing". But the reason the media talks like this, is that most American's do NOT understand market fundamentals and therefore are relying on their "misguided common" sense which says to them that every time we buy their goods, that money we gave them is lost to us forever and is only spent once and only stimulates their economy. So thats what our media says because people's fear sells newspapers. An article in a newspaper explaining this concept to the people would not sell but one with headlines about growing deficits will.
All a trade deficit means is that from the above 2 choices I listed, foreigners are choosing #2 rather than #1.
"Strong growth economies such as the United States, Australia and Hong Kong run consistent trade deficits, as do poorer growing economies (where heavy investment fuels growth and the trade deficit).
Mature but stagnant economies such as Canada, Japan, and Germany typically run trade surpluses. China also has a trade surplus. A higher savings rate generally corresponds with a trade surplus. Correspondingly, the United States with its negative savings rate consistently has high trade deficits."
Regarding the Fed, I agree with Ahrara. Despite whatever shortcomings it may have, it has a pretty dang good track record (especially in post WW2 time). I would worry much more about fiscal policy--that has not performed as well as monetary policy has.
Here you can see our growth rates and observe the severity of recessions post WWII and before.
On January 30 2009 06:35 Savio wrote: Also I hope nobody comes out with the lame argument "we can't give people money and freedom to choose what to spend it on, or they will just buy a bunch of Chinese goods and stimulate China's economy". That is what people who don't understand economics would want to say due to what I call "misguided common sense". It is NOT true that a trade deficit is bad for your economy. This is because every time you buy an import with American $$$$, that money can only be used by them to either:
1. Buy American goods or 2. Invest in American business
Sure you can exchange it for a ruble, but when you zoom out, every dollar has to eventually come back to an economy that uses the dollar. Its not like the money exchangers are printing rubles and burning dollars when they do an exchange.
So, if a country like the US has an overall trade deficit, then we must have an investment surplus, which has been true for a LONG time. Countries with which we have a trade deficit invest a LOT of money into the US which is a good thing because US consumers do not have a very high savings rate meaning our domestic investments are very low. The US has also always been a very good place for investors to invest so they choose to spend the money they got when they sold their goods to us in investments rather than in American goods.
Now, this is gonna confuse some people because the media is always talking about how our "trade deficit" is growing and that is a "bad thing". But the reason the media talks like this, is that most American's do NOT understand market fundamentals and therefore are relying on their "misguided common" sense which says to them that every time we buy their goods, that money we gave them is lost to us forever and is only spent once and only stimulates their economy. So thats what our media says because people's fear sells newspapers. An article in a newspaper explaining this concept to the people would not sell but one with headlines about growing deficits will.
All a trade deficit means is that from the above 2 choices I listed, foreigners are choosing #2 rather than #1.
Thank you. And I'd just like to add that a trade deficit means that we're getting their goods and in exchange, they're investing in us, buying capital that makes our workers more productive and efficient. Seems like a pretty good deal for us doesn't it?
The only way this is bad is if we run a large trade deficit AND we're seen as a bad place to invest. Then the dollar is just going to drop as the only other way to balance the payments (or we'll hike up tariffs or something equally as stupid).
On January 30 2009 06:22 Savio wrote: I say if we are gonna spend 800 billion dollar, lets just give it straight to people. Give it to them in equal amounts (that is very progressive since the poor people get the same as rich people without having contributed in the first place). $800 billion is roughly $2,666 per PERSON. That includes children and minors. So a family of 4 would get $10,666. Now the people have that money and if they need it for their mortgage, then they use it on that. If they need it to pay off their car so it doesn't get repossessed, they do that. If what they REALLY need is a new computer or whatever it is, they can choose themselves. And THAT would stimulate the economy while giving maximum benefit to each individual since preferences between people and current needs are so different.
Also, I might add that even though the government has given out a stimulus check before and it didn't have very much effect, recall also that they were giving out tiny amounts. My family of 3 got like 300 dollars or somthing like that. That is too small to have a measurable effect.
I say, if we are going to spend 800 billion dollars, then fine, but lets let people maximize their own utility and get the maximum benefit out of it.
Actually, I believe there are even more efficient ways of creating stimulus, mostly through using the tax system to alter the incentives faced by people and businesses. Two of the best ideas that I've heard are:
An investment tax credit. Assuming that you make it clear that it will be temporary, this will do a lot to not only put money into the economy to stimulate demand, but will also encourage capital investment NOW and will help free up money stuck in supersafe investments.
A payroll tax reduction. This will also put money into the economy, but at the same time will reduce the cost of hiring (or not firing) labor, keeping more people in jobs and reducing costs for businesses close to going under.
Lots of things could be done to the tax system that would help. But one good aspect of stimulus checks is that they are FAST. The major complaint against fiscal Keynesian policies, is that the government is too slow to implement them and once implemented, they take to long to cause an effect.
On January 30 2009 06:56 Savio wrote: Lots of things could be done to the tax system that would help. But one good aspect of stimulus checks is that they are FAST. The major complaint against fiscal Keynesian policies, is that the government is too slow to implement them and once implemented, they take to long to cause an effect.
Payroll cuts or investment tax credits are not only just as fast, but they also do more that just blindly stimulate demand, they provide additional incentives to hire and invest by reducing their costs, two things that we need desperately right now.
I mean, I think that straight checks would be hugely better than the current monstrosity that is going through (and will probably pass) Congress, but I think that there are also more targeted measures you can take than just giving people money.
On January 30 2009 05:04 oneofthem wrote: investing in your population is obviously investing in the economy especially given the importance of skilled workers. education and healthcare are not "baww the poor are jacking our moneys" projects. they help keep your workforce ready.
besides, the basic point of the economy is to provide a living for people. the govt should look out for the economic future of the lower middle class.
If the government is trying to look out for the economic future of the lower middle class, they should stop inefficiently spending money now. The money they spend now is at the cost of future growth.
no. the problem is that a large segment of the us population is not equipped with skills to get growth jobs. real wage for these people will not rise, and their traditional sources of employment are not doing well. you have to invest in education, and guarantee an income level that is sufficient to justify getting their kids to go to school instead of having them enter the work force early and unprepared.
On January 30 2009 05:04 oneofthem wrote: investing in your population is obviously investing in the economy especially given the importance of skilled workers. education and healthcare are not "baww the poor are jacking our moneys" projects. they help keep your workforce ready.
besides, the basic point of the economy is to provide a living for people. the govt should look out for the economic future of the lower middle class.
If the government is trying to look out for the economic future of the lower middle class, they should stop inefficiently spending money now. The money they spend now is at the cost of future growth.
no. the problem is that a large segment of the us population is not equipped with skills to get growth jobs. real wage for these people will not rise, and their traditional sources of employment are not doing well. you have to invest in education, and guarantee an income level that is sufficient to justify getting their kids to go to school instead of having them enter the work force early and unprepared.
I don't think that is right. You didn't provide any evidence for it and the only paper I have read that dealt with that was an academic Journal article on illegal immigration which showed that part of the reason for the recent rise in illegal immigration is that the US workforce shifted to higher skill set--meaning more American's were skilled as opposed to unskilled--and that created a shortage of unskilled labor which was filled by illegal immigrants.
You have any evidence that the US labor force is unskilled?
EPT
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