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View Full Version : IT'S OFFICIAL: STIMULUS FAILED!



LWW
07-04-2011, 05:08 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">When the Obama administration releases a report on the Friday before a long weekend, <span style='font-size: 11pt'>it’s clearly not trying to draw attention to the report’s contents.</span> Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, <span style='font-size: 11pt'>provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.</span>


<span style='font-size: 14pt'><u><span style="color: #3333FF">The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama</span></u>, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.</span>

<span style='font-size: 17pt'>In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.</span>

Furthermore, the council reports that, <span style='font-size: 11pt'>as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now.</span> I<span style='font-size: 14pt'>n other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.</span>

<span style="color: #3333FF"><u><span style='font-size: 17pt'>Again, this is the verdict of Obama’s own Council of Economic Advisors, which is about as much of a home-field ruling as anyone could ever ask for. In truth, it’s quite possible that by borrowing an amount greater than the regular defense budget or the annual cost of Medicare, and then spending it mostly on Democratic constituencies rather than in a manner genuinely designed to stimulate the economy, Obama’s “stimulus” has actually undermined the economy’s recovery — while leaving us (thus far) $666 billion deeper in debt.</span></u></span>

The actual employment numbers from the administration’s own <span style='font-size: 14pt'>Bureau of Labor Statistics show that the unemployment rate was 7.3 percent when the “stimulus” was being debated. It has since risen to 9.1 percent. Meanwhile, the national debt at the end of 2008, when Obama was poised to take office, was $9.986 trillion (see Table S-9). It’s now $14.467 trillion — and counting.</span>

All sides agree on these incriminating numbers — and now they also appear to agree on this important point: The economy would now be generating job growth at a faster rate if the Democrats hadn’t passed the “stimulus.” </div></div>

And THIS (http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html) is the most positive spin that they can possibly put on the abject failure that is Obamanomics.

Anyone who isn't a hyper-partisan nit can see by now that the nation has been sold down the river to democrook special interests.

But, of course, anyone with the slightest clue of how the real world works would have realized this when the stimulus was being debated in congress.

Soflasnapper
07-04-2011, 04:37 PM
"Appear" being the operative weasel word. Of course, they do not agree with that, or the other principle claim, which this author paraphases as 'in other words':

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it. In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.
</div></div>

They also did not say that.

Actually, the part of the stimulus that went to the states to prevent huge layoffs is over, and now the states are reducing their workforces absent those federal subsidies . It is the net decline in state workforces that is causing the jobs numbers to look still more anemic, even though the average number of new jobs still averages out to 160,000 a month including that recent figure of only 54,000 or whatever it was.

It is very clear what happened after the stimulus package was passed and began to be phased in. The job losses moderated, fewer and fewer were lost over some months, and then net jobs became created. The GDP went from declining (a lot) to expanding, and has remained in expansion since that time.

So, to recap, the economy went from recession to expansion, jobs went from 750,000 lost a month to gaining an average of 160,000 a month, all synchronistically occurring just as the stimulus started taking effect and through to now. Post hoc ergo propter hoc is a logical fallacy, of course, but WHAT ELSE occurred in this time frame that you'd point to as causing this turnaround, other than the stimulus?

This is only a failure if you change what it was supposed to be able to accomplish.

Soflasnapper
07-04-2011, 05:15 PM
What are the REAL conclusions of this report? You know, the ones they wrote?

This is what they highlight as their conclusions:

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Among the key findings of the study are the following:

Following implementation of the ARRA, the trajectory of the economy changed significantly. Real GDP began to grow steadily starting in the third quarter of 2009 and private payroll employment increased on net by 1.7 million from the start of 2010 to the end of the first quarter of 2011. (From the employment trough in February 2010 to May 2011 private payroll employment increased by 2.1 million.)

The two established CEA methods of estimating the impact of the fiscal stimulus suggest that the ARRA has raised the level of GDP as of the first quarter of 2011, relative to what it otherwise would have been, by between 2.3 and 3.2 percent. These estimates are very similar to those of a wide range of other analysts, including the non-partisan Congressional Budget Office.
CEA estimates that as of the first quarter of 2011, the ARRA has raised employment relative to what it otherwise would have been by between 2.4 and 3.6 million.

The Recovery Act was designed to be temporary. The amount of stimulus outlays and tax reductions has begun to decline and, as discussed in previous reports, as it does so the impact on the level of GDP and employment will lessen over time.</div></div>

Which is to say, not what the reporter said they said at all.

LWW
07-05-2011, 04:35 AM
Actually ... it does.

Qtec
07-05-2011, 04:42 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">Actually ... it does. </div></div>

O....M....G,

<span style='font-size: 17pt'>The great debator reduced to 3 word replies.</span>

How pathetic but...but not unexpected.

Q... ...why not just post a pic of you sticking your tongue out because that's basically what your are doing.

LWW
07-05-2011, 05:08 AM
It takes so little effort to slay the myths presented here by the cabal ... I seriously wish you all were more capable of rational discussion.

Sev
07-05-2011, 05:44 AM
Looks like the release of the oil reserves has bottomed out. Just heard they are predicting the price to start rising now that the 4 has passed.

Gas is currently 93% higher than in 2009.

The unacknowledged inflation index is going to keep rising as businesses can no longer absorb the increases in wholesale prices stemming from the increase in petroleum.

Annual GDP is looking as if it will remain below 2%.
Unemployment filings still in 400,000 range.
No shovel ready jobs.
The next wave of government union layoffs is in the pipeline.
The next wave of foreclosures in the housing market is in the pipeline.

The only bright spot seems to be that global sales are increasing while sales withing the US remain relatively stagnant.

LWW
07-05-2011, 06:55 AM
I almost named the title "STIMULUS HAS SUCCEEDED."

A scared population is much more likely to go along with trading a sure loss of liberty for the lie of salvation and prosperity.

The lasy century has a long history of Leninbots, Stalinbots, Hitlerbots, Mussolinotrons, Potbots, Castrotrons, and Obamatrons who are willing to believe whatever comes for their latest godking.

Mobs never change.

Soflasnapper
07-05-2011, 03:57 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Sev</div><div class="ubbcode-body">Looks like the release of the oil reserves has bottomed out. Just heard they are predicting the price to start rising now that the 4 has passed.

Gas is currently 93% higher than in 2009.

The unacknowledged inflation index is going to keep rising as businesses can no longer absorb the increases in wholesale prices stemming from the increase in petroleum.

Annual GDP is looking as if it will remain below 2%.
Unemployment filings still in 400,000 range.
No shovel ready jobs.
The next wave of government union layoffs is in the pipeline.
The next wave of foreclosures in the housing market is in the pipeline.

The only bright spot seems to be that global sales are increasing while sales withing the US remain relatively stagnant.
</div></div>

All true so far as I know, except the speculation about gas. Although summer time does see gas prices rise, so perhaps that too, although I haven't seen anything suggesting the full allotment of the release of the SPR oil has already taken place.

If your point in bringing this up is to say the stimulus didn't work, however, I disagree.

It took a free-falling economy (-6% gdp 4Q08, 750,000 jobs lost each month), stabilized it, and helped create (admittedly tepid) economic growth. Unemployment is always a lagging indicator in recoveries, and until that is improved significantly, things will remain slow and deficits large.

LWW
07-05-2011, 05:01 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">It took a free-falling economy (-6% gdp 4Q08, 750,000 jobs lost each month), stabilized it, and helped create (admittedly tepid) economic growth. Unemployment is always a lagging indicator in recoveries, and until that is improved significantly, things will remain slow and deficits large.
</div></div>

What, in specific, about the stimulus achieved these results you brag about?

Soflasnapper
07-07-2011, 02:11 PM
Basic economic theory. (It's similar to hydraulics.)

The level of economic production is dependent upon how much money there is, and its velocity (turnover rate), as well as other factors. (Or how much fluid there is in the hydraulic system, and how that's multiplied in effect by channeling it to increase its mechanical advantage.)

This was the key finding of the monetarist school (Milton Friedman was the author, earning a Nobel Prize in economics for his analysis), proving the Great Depression was gravely worsened and extended by the fall of the money supply by some 30%. Bernanke is a serious student of Friedman's work, and made sure those mistakes then were not repeated.

More, the amount of money available in this country is determined by loans and their attendant debt.

Although the people in general have had nearly no real income growth for quite awhile, their houses were going up in value, and so were their 401ks in the market. This extra wealth created a well understood wealth effect, wherein people would be willing to spend more, even go more in debt, because they figured they had this extra wealth backing them up. This sustained demand for goods and services in the economy, even as consumers' balance sheets deteriorated.

This financial crisis removed those supports to consumer demand. People lost their equity in their houses, many of which went under water in value compared to the outstanding loan amounts, and 401ks became 201ks, as the value of the stock markets crashed. People were more leveraged than ever in debt, and finally got a clue that they should rein in their spending and debt, which again hurt the consumer driven economy, even for people still employed who had reasonable levels of debt.

As people retrenched and either chose or were forced to spend a lot less, so too did businesses react similarly. With far less consumer demand, they both laid off employees and didn't invest more in new plant and equipment (which would have no buyers of its output under the current economic strains).

So, consumers are tapped out, retrenching their spending habits, and business is also heavily leveraged in debt, and will not spend when the consumers aren't buying. Velocity is down.

Also the amount of money and wealth has been severely trimmed as well. I forget the exact numbers, but something like $10 trillion was lost in real estate value, and about the same in stocks' value. As loans go into default, and/or are paid off with not the same amount of lending going on to replace it, the money supply is shrunk by a multiple of this factor.

So it's like you've lost brake fluid (consumer demand), AND the hydraulics are also malfunctioning (the multiplication effect of the fractional reserve system was working in reverse, as loans went bad and were not replaced by other loans). No brakes.

What Obama's policy did was put more brake fluid in the reservoir. Even as it continued to leak out, and repair was necessary, still, by putting more into a faulty system, some function was restored, and maybe we could limp into the auto repair shop under power instead of having to push the car miles by hand.

The economy was likely in a death spiral, a perfect storm, as all the reactions worsened the situation. As has often been said, we were able to stop going over the edge into the abyss, albeit at the cost of a lot of brake fluid addition.

Oddly, this policy was kind of a mixture of Keynesianism and monetarism, with both of these opposite economic theories recommending the same expansionistic fiscal policy by the federal government.

ugotda7
07-07-2011, 02:22 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Soflasnapper</div><div class="ubbcode-body">Basic economic theory. (It's similar to hydraulics.)

The level of economic production is dependent upon how much money there is, and its velocity (turnover rate), as well as other factors. (Or how much fluid there is in the hydraulic system, and how that's multiplied in effect by channeling it to increase its mechanical advantage.)

This was the key finding of the monetarist school (Milton Friedman was the author, earning a Nobel Prize in economics for his analysis), proving the Great Depression was gravely worsened and extended by the fall of the money supply by some 30%. Bernanke is a serious student of Friedman's work, and made sure those mistakes then were not repeated.

More, the amount of money available in this country is determined by loans and their attendant debt.

Although the people in general have had nearly no real income growth for quite awhile, their houses were going up in value, and so were their 401ks in the market. This extra wealth created a well understood wealth effect, wherein people would be willing to spend more, even go more in debt, because they figured they had this extra wealth backing them up. This sustained demand for goods and services in the economy, even as consumers' balance sheets deteriorated.

This financial crisis removed those supports to consumer demand. People lost their equity in their houses, many of which went under water in value compared to the outstanding loan amounts, and 401ks became 201ks, as the value of the stock markets crashed. People were more leveraged than ever in debt, and finally got a clue that they should rein in their spending and debt, which again hurt the consumer driven economy, even for people still employed who had reasonable levels of debt.

As people retrenched and either chose or were forced to spend a lot less, so too did businesses react similarly. With far less consumer demand, they both laid off employees and didn't invest more in new plant and equipment (which would have no buyers of its output under the current economic strains).

So, consumers are tapped out, retrenching their spending habits, and business is also heavily leveraged in debt, and will not spend when the consumers aren't buying. Velocity is down.

Also the amount of money and wealth has been severely trimmed as well. I forget the exact numbers, but something like $10 trillion was lost in real estate value, and about the same in stocks' value. As loans go into default, and/or are paid off with not the same amount of lending going on to replace it, the money supply is shrunk by a multiple of this factor.

So it's like you've lost brake fluid (consumer demand), AND the hydraulics are also malfunctioning (the multiplication effect of the fractional reserve system was working in reverse, as loans went bad and were not replaced by other loans). No brakes.

What Obama's policy did was put more brake fluid in the reservoir. Even as it continued to leak out, and repair was necessary, still, by putting more into a faulty system, some function was restored, and maybe we could limp into the auto repair shop under power instead of having to push the car miles by hand.

The economy was likely in a death spiral, a perfect storm, as all the reactions worsened the situation. As has often been said, we were able to stop going over the edge into the abyss, albeit at the cost of a lot of brake fluid addition.

Oddly, this policy was kind of a mixture of Keynesianism and monetarism, with both of these opposite economic theories recommending the same expansionistic fiscal policy by the federal government.

</div></div>

Are these your words?

Soflasnapper
07-07-2011, 03:10 PM
Sure, backed up by my Wackipedia source as I've described previously.

To be sure, however, it's a story that many have told in one way or another (which has influenced me), minus the poor hydraulic analogy, for which I take sole blame.

LWW
07-08-2011, 03:29 AM
Your argument is analogous to claiming that since dropping a hammer on my left foot hurt, I should be safe dropping a hammer on my right foot.

Yes ... FDR ran a disastrous monetary/economic policy by tightening the money supply. And, of course, the far left declared him to an omniscient godking.

Carter also had a disastrous policy by overprinting money. And, of course, the far left declared him to an omniscient godking.

Dear leader has doubled down on Imam Carter's stupidity ... to rave reviews from the far left.

Explain to us again how raised unemployment ... suppressing wage growth ... with the real rate of inflation nearing 10% per annum is a glorious success. Ohhh ... don't forget to add in how 4.5% UE was the worst economy since the great depression, and how the left elected this muttley crew to "FIX" things.

Soflasnapper
07-08-2011, 06:21 PM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Yes ... FDR ran a disastrous monetary/economic policy by tightening the money supply. And, of course, the far left declared him to an omniscient godking.

Carter also had a disastrous policy by overprinting money. And, of course, the far left declared him to an omniscient godking.</div></div>

Not true, of course. You are most confused.

FDR didn't tighten the money supply. He did try to balance the budget using fiscal policy, when a looser fiscal policy was still necessary, and paid the price with the economy slipping into another recession. His party paid the price by losing a huge number of House seats. But the money supply decrease was the policy of the Federal Reserve. As minutes of their meetings showed, they thought too much money around would harm their profits, and shut down some infusions of liquidity that had been begun. Actually, what FDR tried to do is what the GOP says is a good idea now, and it caused a return to recession.

Carter didn't print money. Arthur Burns, whom he inherited as Fed Chair, had a very loose monetary policy, and then G. William Miller, the next head of the Fed, had a loose monetary policy. Carter got Miller out of the job and appointed Paul Adolph Volcker, who we may remember had about the tightest monetary policy ever. Carter was so much not the favorite of the far left that he was primaried FROM THE LEFT.

cushioncrawler
07-09-2011, 03:39 AM
"......This was the key finding of the monetarist school (Milton Friedman was the author, earning a Nobel Prize in economics for his analysis), proving the Great Depression was gravely worsened and extended by the fall of the money supply by some 30%. Bernanke is a serious student of Friedman's work, and made sure those mistakes then were not repeated...."

There iz no, never woz no, and never will be no, NoNobel surPrize for Krappynomix.
mac.

cushioncrawler
07-09-2011, 03:41 AM
The usofa, the home of canned laughter, canned happyness, canned demokracy, and the home of krappynomix, will shortly bring u depression in a can.
mac.

LWW
07-09-2011, 06:06 AM
You would have a quite compelling argument ... if you had the facts on your side.

Sadly, again, you don't.

Let's review.

Under the FDR/democrook regime ... they inherited a debt of $22.5B and by 1941, before the start of the war, they had more than doubled it to $48.9B. By his death it had grown to $258.6B.

Hence, FDR and the democrooks grew the deficit by over 1,000%. Now, I'll give them a pass for the 1942-1945 numbers.

To be fair ... during the 9 years prior to the 1933-1941 era, the debt grew by a total of $1.29B. FDR's pre-war 9 years grew it by $26.4B ... or almost 2,000% as much as the prior 9 years.
OH DEAR! (http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo3.htm)

Upon review, however, Hoover did begin the money tightening which FDR continued.

Following deflation, FDR did adopt inflationary policy ... much like dear leader and Bernanke today ... to relieve the losses being incurred by FDR backers.

Among these efforts were "FARM PRICE SUPPORTS" which involved the burning of crops and slaughter of livestock while millions of Americans were going hungry.

This is not an endorsement of the GOP ... I notice you are like the rest of the cabal in that you cannot fathom that someone who opposes the democrook policy also opposes the republichicken alternatives in many/most cases ... as the FDR "NEW DEAL" which the left slavishly claims saved America was simply an acceleration of the Hoover policies which the left slavishly claims created the great depression.

Again, the analogies are chilling when compared to today.

Soflasnapper
07-09-2011, 02:30 PM
This would be more convincing if you didn't mistake total debt for deficit. And if you didn't say you understood that debt run up to fight WW II didn't really count against their fiscal record, and then use that number to make your final claim.

If we correct for those excesses, you find the DEBT went up 100% (not the deficit up 1,000%) for all the pre-war period, for all the public works expenditures across the alphabet soup of agencies and programs. What is startling, given the numbers you show the rise of debt under Hoover was less than under FDR's pre-war time, was that as a percentage of gdp, Hoover doubled that figure from 20% gdp to 40% gdp, and although the raw numbers for FDR's pre-war time were more, as a percentage of gdp, that greater debt remained the same, leveling off at that same 40% (until war spending occurred).

http://en.wikipedia.org/wiki/File:Debt1929-50.jpg

Graphic from Wiki on Hoover (http://en.wikipedia.org/wiki/File:Debt1929-50.jpg)

Thinking just a bit further, after WW II, where in some years we borrowed more than 50% of the government budget, and as you almost correctly said, we'd increased our national debt some 1,000%, somehow we weren't broke, but were the most prosperous country on the earth, and far better off economically than in the prior FDR terms. Massive military Keynesianism deficits brought everyone into jobs, and despite blowing up or using up a lot of that production, having so many people working raised our economy to high levels.

Most people don't understand that FDR campaigned on Hoover-like policies in his first campaign, and that he implemented the 'reduce the deficit at all costs' policies that he did. Still fewer understand that after he switched to a Keynesian stimulative policy instead, he then re-pivoted to trying to balance the budget again, too soon, and caused another recession by doing so. True enough.

But the analysis that should be clear was that trying to be a deficit hawk at the beginning, and then again about mid-way to wartime, WAS FDR'S MISTAKEN FISCAL POLICY, given the lingering effects of the Great Depression. That is, turning to tightening fiscal policy when there was such widespread poverty and unemployment was counter-productive, and spending what would be considered irresponsible amounts extra, was what worked.

Moreover, before Hoover became a fiscal hawk, what had he done prior to the onset of the Great Depression? Put in large tax cuts for the wealthy, which neither stimulated the economy enough to keep it out of depression, and in fact, helped CREATE the depression, as the large amounts of extra money they gained went into speculative excesses in the stock market, which crash helped precipitate the general economic collapse. Almost the story of the last presidency.

I think it was Marx who said history repeats itself, coming first as tragedy, and then as farce.

Yes, there are many parallels between the Great Depression and now, but those lessons are apparently the reverse of what you argue.