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Porkulus, Part II?

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  • Porkulus, Part II?

    So, now that we are sufficiently distracted by the mosque in WTC site, let's talk about the need for another round of porkulus.

    Porkulus I worked so well that the feds believe we should have another one. What was the definition of insanity? Keep doing the same thing and hope for a different result? Socialist government likes to throw money at the problem. If the problem persists, it means we haven't thrown enough money at it. Japan has been stimulating itself for the past 20 years (sounds like a bad JAV...). So far, nada. Two decades lost.

    How big do you think Porkulus II will be? Half a trillion? One trillion? One and a half trillion?

    A trillion here and a trillion there, pretty soon you're talking real money.

    Imagine, just 15 years ago Dr. Evil thought he had the world by the balls and asked for an astronomical sum of ... $100 billion !!!

    Obama and the democrats can cover that with the 1st installment of Porkulus I. Would you like that in check or wire transfer, Dr. Evil?
    Last edited by gunnut; 03 Sep 10,, 18:54.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  • #2
    The spectacular failure of the Keynesians. We're witnessing it live.

    Porkulus I got us 10% unemployment, maybe another half trillion will get us to the 15% mark.

    They are so clueless they think thay can entice small businesses to borrow money. News flash- small businesses are not the government. We aren't going to borrow money when there is no demand.

    Let's tax big businesses, the main customer of the small business, lol. You can't penalize one sector at the expense of another- they are inter-related.

    Businesses are sitting on about double their normal cash reserves. Why? Because we don't know what kind of new mandates/taxes/entitlement funding we're going to be slapped with next.

    (hey! new smileys) dems> :hammer: <highsea
    "We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way." -President Barack Obama 11/25/2008

    Comment


    • #3
      Hey, the economy is not picking up. We will do everything possible to stimulate the economy, except cutting taxes, reduce spending, decrease regulation. You know, we will do everything except what works.

      Here's my plan to stimulate the economy.

      1. Repeal Obamacare
      2. Repeal "financial overhaul"
      3. Dissolve Fannie and Freddie
      4. Make Bush tax cut permanant
      5. End Porkulus I
      6. Deregulate health insurance industry
      7. Stop the growth of federal government

      Watch the economy take off, possibly in spectacular fashion like what we have experienced during the failed policies of the Bush administration.

      Now I understand what the democrats mean when they refer to the "failure" of Bush economy. Bush "failed" to raise unemployment rate and stop our GDP growth.

      "Obamanomics" will succeed in stopping our growth and raise unemployment rate. Only then will the people depend on the government for their daily needs.
      "Only Nixon can go to China." -- Old Vulcan proverb.

      Comment


      • #4
        From NYT as you already knew. Remeber all that runaway inflation the right proclaimed we'd face in 2009-2010. Well, we are on the edge of deflation and if you think pumping one trillion less into the economy didn't at the least counter deflationary pressures please explain why to me. Goverment is now cutting jobs that would of been cut a year ago without the porkulus funds to help state and local goverments and the private sector is finally hiring. You think things would of been better with more layoffs a year ago?
        The Real StoryBy PAUL KRUGMAN
        Next week, President Obama is scheduled to propose new measures to boost the economy. I hope they’re bold and substantive, since the Republicans will oppose him regardless — if he came out for motherhood, the G.O.P. would declare motherhood un-American. So he should put them on the spot for standing in the way of real action.

        But let’s put politics aside and talk about what we’ve actually learned about economic policy over the past 20 months.

        When Mr. Obama first proposed $800 billion in fiscal stimulus, there were two groups of critics. Both argued that unemployment would stay high — but for very different reasons.

        One group — the group that got almost all the attention — declared that the stimulus was much too large, and would lead to disaster. If you were, say, reading The Wall Street Journal’s opinion pages in early 2009, you would have been repeatedly informed that the Obama plan would lead to skyrocketing interest rates and soaring inflation.

        The other group, which included yours truly, warned that the plan was much too small given the economic forecasts then available. As I pointed out in February 2009, the Congressional Budget Office was predicting a $2.9 trillion hole in the economy over the next two years; an $800 billion program, partly consisting of tax cuts that would have happened anyway, just wasn’t up to the task of filling that hole.

        Critics in the second camp were particularly worried about what would happen this year, since the stimulus would have its maximum effect on growth in late 2009 then gradually fade out. Last year, many of us were already warning that the economy might stall in the second half of 2010.

        So what actually happened? The administration’s optimistic forecast was wrong, but which group of pessimists was right about the reasons for that error?

        Start with interest rates. Those who said the stimulus was too big predicted sharply rising rates. When rates rose in early 2009, The Wall Street Journal published an editorial titled “The Bond Vigilantes: The disciplinarians of U.S. policy makers return.” The editorial declared that it was all about fear of deficits, and concluded, “When in doubt, bet on the markets.”

        But those who said the stimulus was too small argued that temporary deficits weren’t a problem as long as the economy remained depressed; we were awash in savings with nowhere to go. Interest rates, we said, would fluctuate with optimism or pessimism about future growth, not with government borrowing.

        When in doubt, bet on the markets. The 10-year bond rate was over 3.7 percent when The Journal published that editorial; it’s under 2.7 percent now.

        What about inflation? Amid the inflation hysteria of early 2009, the inadequate-stimulus critics pointed out that inflation always falls during sustained periods of high unemployment, and that this time should be no different. Sure enough, key measures of inflation have fallen from more than 2 percent before the economic crisis to 1 percent or less now, and Japanese-style deflation is looking like a real possibility.

        Meanwhile, the timing of recent economic growth strongly supports the notion that stimulus does, indeed, boost the economy: growth accelerated last year, as the stimulus reached its predicted peak impact, but has fallen off — just as some of us feared — as the stimulus has faded.

        Oh, and don’t tell me that Germany proves that austerity, not stimulus, is the way to go. Germany actually did quite a lot of stimulus — the austerity is all in the future. Also, it never had a housing bubble that burst. And with all that, German G.D.P. is still further below its precrisis peak than American G.D.P. True, Germany has done better in terms of employment — but that’s because strong unions and government policy have prevented American-style mass layoffs.

        The actual lessons of 2009-2010, then, are that scare stories about stimulus are wrong, and that stimulus works when it is applied. But it wasn’t applied on a sufficient scale. And we need another round.

        I know that getting that round is unlikely: Republicans and conservative Democrats won’t stand for it. And if, as expected, the G.O.P. wins big in November, this will be widely regarded as a vindication of the anti-stimulus position. Mr. Obama, we’ll be told, moved too far to the left, and his Keynesian economic doctrine was proved wrong.

        But politics determines who has the power, not who has the truth. The economic theory behind the Obama stimulus has passed the test of recent events with flying colors; unfortunately, Mr. Obama, for whatever reason — yes, I’m aware that there were political constraints — initially offered a plan that was much too cautious given the scale of the economy’s problems.

        So, as I said, here’s hoping that Mr. Obama goes big next week. If he does, he’ll have the facts on his side.
        It should be interesting to hear why helping small businesses get credit or giving them tax breaks is bad. I've yet to hear a coherent reason from those in opposition. They argue they need the high end of the Bush taxcuts for small business and yet oppose measures designed to aid small business? keynes is dead long live keynes
        I’m not the first to make this point, but when people make Germany-US comparisons, there’s an important contrast between the GDP comparison, in which Germany actually does slightly worse:


        Eurostat
        and the employment picture, in which Germany does much better:


        OECD
        What is this telling us? German growth hasn’t been great, one quarter notwithstanding; but it avoided US-style mass layoffs even when it was slumping badly. Part of the explanation is the Kurzarbeit program of work-sharing; also, Germany’s labor laws and its strong unions have led to a situation in which workers aren’t treated as much as variable costs as they are here.

        So American conservatives now holding up Germany as a role model are actually praising the virtues of Eurosclerosis, and disparaging American-style capitalism.
        Kurzarbeit - NYTimes.com link has graphics
        Where free unions and collective bargaining are forbidden, freedom is lost.”
        ~Ronald Reagan

        Comment


        • #5
          highsea,

          The spectacular failure of the Keynesians. We're witnessing it live.
          not really-- keynesians such as krugman above have been consistent about this even BEFORE the stimulus-- that it was too small.

          as it is, there's much firmer proof against the monetarist theory of economics, as we've done ALL that the monetarists have asked for, instead of half (or less) of what the keynesians have asked for...and the economy is still the way it is now. which is bad, but beats all hell out of the great global depression that most certainly would have followed were it not for the bank bailouts and the haphazard global attempt at synchronized stimulus.

          since then, the keynesian fears of a japanese-style deflationary economy have been, given the bond market, have been more accurate in the medium-term than the freshwater school fear of runaway inflation. but we've argued over this in the past. for now, we'll see what the new proposals obama will tout soon enough. i suspect it'll be some form of a payroll tax cut and other tax cuts as the politically easy way out.
          There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

          Comment


          • #6
            Even the democrats agree that "tax cuts" can boost the economy. We see that in all sorts of "tax credits" and "tax holidays."

            Question, why not just decrease tax rates across the board?

            Democrats love to take about how much a tax cut "costs" the government. Let's take that $800 billion porkulus package and translate to a lower tax rate. It "costs" the same to the government but returns the control of that money to the private sector. We can better use that money that the government can. Or is that too scary a concept for the bureaucrats?
            "Only Nixon can go to China." -- Old Vulcan proverb.

            Comment


            • #7
              Originally posted by gunnut View Post
              ...Democrats love to take about how much a tax cut "costs" the government.
              The dems are trying to re-invent the english language. Not taking your money is exactly the same as taking your money and spending it. It's like they are in some alternate universe.

              The Gov't has no money. People who earn money have money. The gov't takes it and then they have less.

              Every dollar the gov't spends costs the people who earned it. It doesn't cost the gov't a thing.

              Originally posted by gunnut View Post
              ...Let's take that $800 billion porkulus package and translate to a lower tax rate. It "costs" the same to the government but returns the control of that money to the private sector. We can better use that money that the government can. Or is that too scary a concept for the bureaucrats?
              It would translate to basically no personal income taxes for a year. Since this would affect only the 1/2 of the population that pay taxes anyway, it would be a "tax cut for the rich".

              Yep. It's too scary a concept for the bureaucrats.
              Last edited by highsea; 07 Sep 10,, 22:43.
              "We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way." -President Barack Obama 11/25/2008

              Comment


              • #8
                A key reason why the Stimulis Bill didnt work and wont work either unless other problems are corrected first

                From Intels CEO who sat with Mr Obama and many others to discuss its failures.;)

                SAN FRANCISCO (CNNMoney.com) -- Intel chief executive officer Paul Otellini said the Obama administration needs to do a lot more to help create jobs and get the economy back on track.

                In an exclusive -- and very candid -- interview with CNNMoney.com, Otellini said politicians simply don't get it when it comes to key economic issues.

                "The decisions so far have not resulted in either job growth or increased confidence. When what you're doing isn't working you rethink it and I think we need to rethink some plans," he said at the Intel Developers Forum in San Francisco.

                Otellini credited the White House for listening to him and other business leaders. "I really think they're trying," he said, adding that he doesn't think there is anti-business sentiment from the administration.

                But Otellini said the $787 billion economic stimulus package passed last year has not done enough to solve problems in the job market. He argued that money not yet spent from that program might be better off allocated elsewhere and took the administration to task for focusing on short-term projects.

                "It doesn't seem to be working the way it is. Swimming pools in Mississippi are not going to create lasting jobs."

                Obama doesn't get it:
                Otellini is also one of the first Fortune 500 CEOs to speak publicly about President Obama's newly proposed $350 billion economic recovery plan. He said that proposal, which includes tax breaks for businesses and research and development incentives, is not the right plan either.
                The way Otellini sees it, Washington must decide what the industries of the future are. "We still subsidize trains and agriculture -- industries of the 19th century. We should decide what's important to us going forward and make sure we've got the education system in place and the capital incentive system in place to do the investment here."

                Otellini also said that a major problem for companies is that they are being held back by high corporate tax rates.

                Otellini says it costs Intel (INTC, Fortune 500) $1 billion more to build a factory in the U.S. than abroad because of a lack of U.S. tax incentives. The company has a multi-billion dollar factory slated to open in China this October.

                "You have to weigh the advantages of working here, the security of working here in this country...against that billion dollars."

                Otellini questioned why global business leaders would want to do business in the U.S. due to the cost, saying it is critical to incentivize foreign countries to invest in America. "Our corporate taxes are twice what they are in the rest of the world. You want corporations to invest here."

                Intel is on pace for what Otellini predicts could be the company's best year ever but said other businesses are not so lucky. "A lot of companies are sitting on the sidelines right now," he said, due mainly to a lack of clarity about taxes and regulation.

                "Take the uncertainly out. Businesses can't invest until they have fewer variables and right now there are just too many variables," he said.
                Fortitude.....The strength to persist...The courage to endure.

                Comment


                • #9
                  gunnut,

                  Even the democrats agree that "tax cuts" can boost the economy. We see that in all sorts of "tax credits" and "tax holidays."

                  Question, why not just decrease tax rates across the board?
                  some tax cuts have greater economic effect per dollar than others.

                  Democrats love to take about how much a tax cut "costs" the government.
                  remember, government services are voted in and mandated, so until you have these same services eliminated, there IS a cost to the government-- the government will need to BORROW MONEY to have both tax cuts and services at the same time.

                  It "costs" the same to the government but returns the control of that money to the private sector. We can better use that money that the government can
                  true 95% of the time, not so true during recessionary/depressionary time periods. individuals tend to save during those times-- which is great on a personal level but bad for reviving the economy.

                  Or is that too scary a concept for the bureaucrats?
                  guess not, because we have the lowest tax rates since the creation of the income tax.


                  Let's take that $800 billion porkulus package and translate to a lower tax rate. It "costs" the same to the government but returns the control of that money to the private sector. We can better use that money that the government can. Or is that too scary a concept for the bureaucrats?
                  There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

                  Comment


                  • #10
                    Originally posted by astralis View Post
                    guess not, because we have the lowest tax rates since the creation of the income tax.
                    Nah. When the income tax was created, the top rate was 7% for incomes over $500,000. A couple years, and the bottom rate went from 1% to 2%, the top rate went to 15% for incomes over $1.5 Million. It didn't get into the really exhorbitant numbers till 1918. That's progressives for ya. It only took 5 years to go from 7% to 77%, lol.
                    "We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way." -President Barack Obama 11/25/2008

                    Comment


                    • #11
                      thanks for the catch-- lowest income taxes since 1918, not 1913. IIRC, the impetus of that was WWI costs.

                      but my point still stands, it's not tax cuts that politicians are afraid of, it's cutting government services.
                      There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

                      Comment


                      • #12
                        Originally posted by astralis View Post
                        gunnut,

                        some tax cuts have greater economic effect per dollar than others.

                        remember, government services are voted in and mandated, so until you have these same services eliminated, there IS a cost to the government-- the government will need to BORROW MONEY to have both tax cuts and services at the same time.

                        true 95% of the time, not so true during recessionary/depressionary time periods. individuals tend to save during those times-- which is great on a personal level but bad for reviving the economy.

                        guess not, because we have the lowest tax rates since the creation of the income tax.
                        That's the difference between you and I. I live in the real world using real accounting. You live in the government world using government accounting.

                        Government doesn't "own" the money from taxes, just like businesses don't "own" the money from projected revenue.

                        Government services are "voted" in by a very small number of politicians. Did we get to vote on Obamacare? Did we get to vote on Social Security? Did we vote on Medicare drug plan? Until we do, scale back these so-called benefits during lean years. We keep adding stuff during flush years but never cut back during lean years. That's why we are in debt. Businesses cut back during lean years to stay afloat. I don't mean to cut everything to balance the budget, but at least try to cut something, sometime.

                        If you want to go the Keynesian route, then we should deficit-spend during lean years, but cut back during flush years to create a rainy day fund. We don't do that either.

                        We can't have it both ways. Something has to give.
                        "Only Nixon can go to China." -- Old Vulcan proverb.

                        Comment


                        • #13
                          Originally posted by astralis View Post
                          thanks for the catch-- lowest income taxes since 1918, not 1913. IIRC, the impetus of that was WWI costs.
                          Well, that's not corect either. There were 5 tax cuts during the 1920's, ultimately returning the bottom bracket to 1% and the top bracket to 25%.

                          Try 1931. We all know how well that worked out.

                          Originally posted by astralis View Post
                          but my point still stands, it's not tax cuts that politicians are afraid of, it's cutting government services.
                          Politicians never stop inventing new government "services". The real bottom line is this: Government's insatiable urge to tax and spend cannot be eliminated. The only solution is to massively shrink the government itself.
                          "We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way." -President Barack Obama 11/25/2008

                          Comment


                          • #14
                            Originally posted by gunnut View Post
                            ...If you want to go the Keynesian route, then we should deficit-spend during lean years, but cut back during flush years to create a rainy day fund. We don't do that either.
                            The keynesian route has never worked, and never will work. Remember the excuse for the Porkulus? To hold unemployment below 8%? Of course that didn't work out, so they changed the bar, and are claiming that it prevented another great depression.

                            It's nice to constantly redefine reality, but the real reality is that dems are hostile to private enterprise, and this "Oconomy" belongs to them. Businesses are sitting this "recovery" out, and rightly so. There are so many new mandates come down that no one has any idea what it will cost to have an employee next year.

                            Next up is a round of tax hikes that will push more capital offshore. Beautiful.
                            "We will go through our federal budget – page by page, line by line – eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way." -President Barack Obama 11/25/2008

                            Comment


                            • #15
                              gunnut,

                              Government services are "voted" in by a very small number of politicians. Did we get to vote on Obamacare? Did we get to vote on Social Security? Did we vote on Medicare drug plan? Until we do, scale back these so-called benefits during lean years. We keep adding stuff during flush years but never cut back during lean years. That's why we are in debt. Businesses cut back during lean years to stay afloat. I don't mean to cut everything to balance the budget, but at least try to cut something, sometime.
                              that argument only works if you're willing to say the US is an oligarchy, not a democracy.

                              but you have the correct argument later, which is for government to spend during the lean years and cut back during the fat years (which is not Keynesian theory, btw).

                              We can't have it both ways. Something has to give.
                              i agree. but the choice should always be services cut first, followed by tax cuts-- other way around never works.
                              There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

                              Comment

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