On Tue, 10 Feb 2009 08:34:41 -0800, "Stuart Fields"
wrote:
"Ed Huntress" wrote in message
...
"John R. Carroll" wrote in message
...
"Ed Huntress" wrote in message
...
"Stuart Fields" wrote in message
...
I wonder why this hasn't hit some of the news channels. I know that I
have not seen this before.
http://www.worldnetdaily.com/index.p...w&pageId=88218
If the Republicans hadn't gutted money for the states from the House
version of the stimulus bill, the 10th Amendment issue would die in a
hurry.
Don't be surprised to see those funds restored to the conferenced version
of the bill Ed.
What I don't understand is why the bill doesn't contain payroll tax
abatement provisions. That could be accomplished with the stroke of a pen
and would be as quick a stimulous as you could get. Republicans would
have been hoist on their own petard, and they'd have been falling all
over themselves to get behind the bill.
Oh, you underestimate their creativity. I'm sure they'd find something to
bitch about no matter what was or was not in the bill.
To them, this is about trying to score political points, not about helping
the country to recover. If you listen to Limbaugh, that's exactly what the
hard-core wants: failure.
And I'm thoroughly disgusted with McCain's grandstanding and sleazy
manuevering. He had it right the first time, when he said that his
understanding of economics is not one of his strong points.
--
Ed Huntress
Ed: I sure didn't vote for McCain but I do share his apparent lack of
understanding of economics (I did get a big fat A in engineering economics
though) but how does decreasing income (tax breaks) and increasing spending
(in spite of an existing and growing large debt) help our economy? If this
is a workable method shouldn't people who recently lost their
jobs(decreasing income)go buy more with their credit cards(increased
spending)? The only difference that I can see is that the Government can
print more money and control the value of the debt.
Stu
----------------
Several factors:
(1) There appears to be a change in the "laws" of economics as
the scale changes, much as occurs when the size of physical
objects change, although their relative size may remain the same,
i.e. from quantum mechanics to Newtonian physics to
Special/General Relativity. For example, savings and ready cash
money are very good at the individual level (and required at some
stages of economic development) at the macro level (and later
stages of economic development) e.g. Japan, these may be
counterproductive, when this leads to an internationally
appreciating currency and you are an exporting country. [drives
your export prices up]
(2) There are different kinds of debt. Even for individuals it
can sometimes make sense to spend, for example buying a new suit
for interviews after a job loss, if you don't have one. For
government, the situation may be that under various entitlement
legislation, they are obligated to spend the funds no matter
what, and it is common sense to spend for infrastructure
improvement rather than simply paying people to sit home and do
nothing, if only because "idle hands are the devil's workshop."
(3) While mildly controversial [values estimated seem too high]
there is the concept of an "economic" multiplier" for different
economic sectors. This is generally assumed to mean that a
profit or "value added" is generated by their economic activity,
and that a dollar "invested" results in more than a dollar
generated. In point of fact, many of the published values IMNSHO
are indeed too high, because of [ignored] externalized and/or
non-economic costs, such as air pollution, and increases in
cancer. Additionally, there appears to exist economic sectors,
that when all the input costs are included, have a multiplier of
less than 1, indicating a increasing net loss of value with
increased investment/activity. Thus it is important, even
critical, if stimulus spending is to be effective, that it is
targeted on economic sectors with high multipliers. One "fly in
the ointment" is that a particular economic sector may have a
high multiplier, but be small in relative dollar volume. Another
caveat is the law of diminishing returns. Much as you can
improve crop yields by the application of fertilizer, too much
fertilizer will burn the crop up and you get nothing.
(4) Frequently there is the situation where to do nothing costs
more, or is likely to cost more, than doing something, for
example putting out a burning building in the middle of town.
Unless steps are taken to put the fire out, there is a high
likelihood of it spreading to other buildings and causing
catastrophic damage. [Lehman Brothers?] It should be noted in
this situation that *CONSIDERBLE* money in the aggregate could
have been saved and possible loss of life could have been
avoided, with a reasonable building code with adequate
inspections/enforcement, for example sprinklers, and the prompt
demolition of derelict and abandoned structures. The same
appears true for the economic community.
==Heroic measures always mean that somebody screwed up.==
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).