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Of course he believes this, he is an idiot. Obama got us into such a huge mess through ideas similar to this, yet he is too arrogant and set in his ways to admit they haven't worked. Real job creation can only occur if he accepts that it can only happen if he executes a plan that he is wholeheartedly against. He simply will not do this anytime soon. He will only continue to pass terrible bills that backfire until he is kicked out of office. Let's just hope the damage isn't permanently done by 2012.
why is it that obama haters always accuse him of the "SAME" tactics and policies that conservative administrations have done? He is creating legislation to encourage economic growth. It is amusing that tax breaks are only popular when a Republican presents them.
Those were public works programs, and all government spending is consumption, and not production. So, no it didn't create 5,200 jobs. It merely shifted jobs from the private to public. Jobs
This is not a valid argument. Consumption of X does not preclude production of Y.
You have millions of people out of work and suddenly there is a demand for thousands of cement pourers, vehicle drivers, Architects and Engineers. How is that not the creation of new jobs?
Your argument essentially amounts to "They are government jobs so they don't count".
You have millions of people out of work and suddenly there is a demand for thousands of cement pourers, vehicle drivers, Architects and Engineers. How is that not the creation of new jobs?
Please read a book other than Keynes or Krugman on that and if it is not them, please GO READ ECONOMICS IN ONE LESSON by Henry Hazlitt
TWO POINTS
1. Broken Window Fallacy is here. Public Works means taxes, if not, deficit spending, which means inflation. Everything must be paid in full. The government can't spend and spend without taxing at all; debt can't pile up without ever paying it off.
Public works is only see what is spent, and not was spent.
So if government taxes to pay for a new bridge, and it is really unneeded, then the money is lost because instead of buying two new suits, I can only but one whereas if I bought two, it would have created jobs.
2. Taxes discourage production. Government spending on creating fake demand for unneeded public works is killing wealth. Government spending is taking money from the right hand and putting it in the left hand, and DECLARING THAT WE ARE RICH.
Therefore, in order to create jobs, wealth must be created, and government can't create wealth, IT CAN ONLY REDISTRIBUTE WEALTH. REPEAT: IT CAN ONLY REDISTRIBUTE WEALTH. Hence, it merely taking jobs and money from the private sector and killing new wealth.
Your argument essentially amounts to "They are government jobs so they don't count".
Where are you? Are you even in the stadium?
Government jobs do count, but they don't create wealth due to redistribution.
Again, government jobs are like having jobs on the right side, then putting them over to the left side, and DECLARING MORE JOBS.
1. Broken Window Fallacy is here. Public Works means taxes, if not, deficit spending, which means inflation. Everything must be paid in full. The government can't spend and spend without taxing at all; debt can't pile up without ever paying it off.
You exclude a third option, cuts. You cut less important programs so that you can redirect that funding towards job creation programs. Even so, if done correctly Public works projects tend to pay themselves off. The Hoover Dam generates, on average, about 4 billion kilowatt-hours of hydroelectric power. The hoover dam only cost about 49 million to build and has paid for itself many times over.
You see with any public works project that stimulates the economy, any increase in the the fluidity of monetary exchange this near universally results in higher tax revenue, because of sales tax and business tax. You give people money and they will buy things, so not only is the sale itself taxed but the increased profits means more business tax as well. It is imperative that people continue to buy things.
So if government taxes to pay for a new bridge, and it is really unneeded, then the money is lost because instead of buying two new suits, I can only but one whereas if I bought two, it would have created jobs
If you can even afford one suit, then either you are within the wealthy elite, or it isn't really a depression/recession. If everybody was out buying suits then the economy is probably not doing so bad and you wouldn't need a public works project. This is why public works projects typically happen during an economic bust. During a bust you probably aren't buying much of anything. Your argument doesn't cover the conditions under which Public Works Projects occur.
2. Taxes discourage production. Government spending on creating fake demand for unneeded public works is killing wealth. Government spending is taking money from the right hand and putting it in the left hand, and DECLARING THAT WE ARE RICH.
This is a weak analogy that doesn't apply to real world circumstances. Public works do not take from the private sector, if done during a poor economic climate as I stated above. Raising aggregate demand when you have high supply, is beneficial to an economy.
Therefore, in order to create jobs, wealth must be created
This is false.
Wealth and economic activity are two different beasts. The United States has plenty of wealth, we are still the wealthiest nation in the world, it is our economic activity which has declined.
Here are two scenarios:
SCENARIO 1:
I have a dollar and you don't. I give you my dollar in exchange for cleaning my gutters. Now you have a dollar. You give your dollar to someone else in exchange for yet another chore and so on and so forth.
SCENARIO 2:
I have a dollar and you don't. I keep my dollar forever. End of scenario.
The overall wealth is the same in both scenarios, one dollar. However in scenario 1 we have rapid monetary exchange which is a measure of economic activity and in Scenario 2 there is no monetary exchange and no economic activity. Even if I were to find ten dollars, if I don't let it circulate then it does the economy absolutely no good. This is the problem we currently have. There is not enough monetary exchange, and thus our economic activity is suffering. People are not buying things like they used to.
We don't need to create wealth to create jobs, what we need to do is to increase demand for the goods and services we already have.
You cut less important programs so that you can redirect that funding towards job creation programs.\
Nice, try, but government never cuts anything. The political special interests are too powerful. So, the third option is irrelevant, and public works means taxes or deficit spending, and when the government already created the economic turmoil, taking more money out of the private economy isn't going to help.
Public works is consumption good.
Even so, if done correctly Public works projects tend to pay themselves off. The Hoover Dam generates, on average, about 4 billion kilowatt-hours of hydroelectric power. The hoover dam only cost about 49 million to build and has paid for itself many times over.
Apparently, the broken window fallacy is something that is beyond your comprehension.
If you can even afford one suit, then either you are within the wealthy elite, or it isn't really a depression/recession.
Seriously, the suit was just an another example besides a lot of friends wear suits in all government levels. Are they wealthy elite with those salaries? How about underwear? Do the wealthy elite only buy underwear? If so, not everyone is buying a suit? They are buying what they need, so in turn, they are creating employment in those industries.
This is why public works projects typically happen during an economic bust. During a bust you probably aren't buying much of anything. Your argument doesn't cover the conditions under which Public Works Projects occur.
Why would you want more government when the government is the reason for the bust? Austrian Business Theory? GO READ UP.
CAN YOU EVEN PINPOINT WHAT KEYNES EXPLANATION OF THE ECONOMIC BUST?
This is a weak analogy that doesn't apply to real world circumstances.
Typical response from Bohemian with no real answer.
Raising aggregate demand when you have high supply, is beneficial to an economy.
Keyenisan aggreate demand blah, blah, blah.
Wealth and economic activity are two different beasts. The United States has plenty of wealth, we are still the wealthiest nation in the world, it is our economic activity which has declined.
Your still wrong.
Wealth is goods and services desired by individuals.
To think deeper about it though, businesses have to have a profit to continue doing business. This means providing goods and services to people that they actually want, at a price they want. What is a profit? A profit can be looked at in terms of goods. This means at the end of the day, one has produced more than one has consumed. If you spend all day laboring to produce two loaves of bread, and you eat both loaves of bread the same day, do you have a profit? No, you just have another day to live. If you spend all day laboring and you produce three loaves of bread, and only eat two, you now have an extra loaf of bread with which you can trade with someone else for something else, like a pencil. The next day you do the same thing, now you have two pencils Eventually you get enough pencils to trade for a chair or a piece of silver. Now, if you only produce 1 1/2 loaves of bread a day, eventually, you will starve to death, because you need to produce at least 2 loaves just to stay alive.
So, the reason governments do not produce wealth, is because they do not have profits. All they have are losses. They always need more money. The reason is twofold. First of all, governments are extremely inefficient. So even if they do produce a good or service that people want, they will do it so inefficiently, that they lose money, and as such, consume wealth by taking from wealth producers to fund their activities (for example, using the bread example, governments will only produce 1 1/2 loaves a day per person). Second of all, many goods and services provided by governments are not desirable. For example, licensing. If governments did not require people to get licenses to do business, no one would. As such, people have to waste their productive efforts buying worthless crap.
Apparently, the broken window fallacy is something that is beyond your comprehension.
No, it simply doesn't apply in this instance, because opportunity cost tends to be very low during an economic downturn. If people were already out buying goods and services then the economy would not be doing so poorly. So when you have very little opportunity cost and greater potential for economic recovery, this is when public works projects are beneficial. We have considerable data showing this to be the case. The hoover dam did improve the economy of the southwest.
Seriously, the suit was just an another example besides a lot of friends wear suits in all government levels. Are they wealthy elite with those salaries? How about underwear? Do the wealthy elite only buy underwear? If so, not everyone is buying a suit? They are buying what they need, so in turn, they are creating employment in those industries.
Except that they are not creating employment in those areas, which is why unemployment is so high. Yes, people are still buying things, but much less so than they were a decade ago. The housing bubble popped because there are too many houses and not enough buyers.
Why would you want more government when the government is the reason for the bust?
Are we talking about busts in general or our current economic bust? If we are talking about busts in general they are the result of natural fluctuations in market activity, and typically occur in intervals relative to the previous boom. It's part of the economic cycle.
If we are talking about our current bust it can best be explained by this video here:
Typical response from Bohemian with no real answer.
Typical response from PrayerFails with no real answer. See how effective this argument is?
Keyenisan aggreate demand blah, blah, blah.
It's no wonder your arguments are so persuasive.
Wealth is goods and services desired by individuals.
Incorrect. Demand is goods and services desired by individuals. Wealth is the net worth of a person, household, or nation, that is, the value of all assets owned net of all liabilities owed at a point in time.
The United states has no shortage of wealth, what we do have is a shortage of demand.
So, the reason governments do not produce wealth, is because they do not have profits.
Let's recap. Profit can lead to wealth. Agreed. Public works projects are not designed to produce a profit for government. Agreed. Because Government does not see a profit from public works projects then no one else will either. Disagree.
When you said that government cannot create a wealth, I assumed you meant for everyone, but your argument only applies to why government itself will not see any wealth from profits, but that is not what the argument is about. Saying that government can't stimulate the economy because it doesn't see a profit is nonsense. The government doesn't have to see a profit to stimulate the economy.
(This is also ignoring the fact that wealth can come from sources besides profit.)
$38 billion in cuts. Watch OUT. That is a considerable amount considering government has over a $1 trillion deficit.
No, it simply doesn't apply in this instance, because opportunity cost tends to be very low during an economic downturn.
Broken Window Fallacy always applies because it is discussing opportunity cost, and that it’s not just the opportunity cost of using money necessarily, but the opportunity cost of the resources being allocated through the use of that money.
If people were already out buying goods and services then the economy would not be doing so poorly.
The economy bust is not due under consumption, it is malinvestment and over consumption due to inflation and credit.
The hoover dam did improve the economy of the southwest.
Except that they are not creating employment in those areas, which is why unemployment is so high.
Probably because there was over consumption and malinvestment.
The housing bubble popped because there are too many houses and not enough buyers.
Right, which is over consumption.
Are we talking about busts in general or our current economic bust?
Bust in general are economic fluctuations in the market.
Economic cycles are due to inflation and low interest rates.
It's no wonder your arguments are so persuasive.
If you ignore my arguments and links, I will ignore yours.
Incorrect. Demand is goods and services desired by individuals.
Correct, that was a TYPO!!!
The United states has no shortage of wealth, what we do have is a shortage of demand.
No, what we do have is a surplus of demand.
When you said that government cannot create a wealth, I assumed you meant for everyone, but your argument only applies to why government itself will not see any wealth from profits, but that is not what the argument is about.
That is what I was saying.
Saying that government can't stimulate the economy because it doesn't see a profit is nonsense. The government doesn't have to see a profit to stimulate the economy.
Ok, fine, you were talking about stimulus. Actually, government spending can't stimulate the economy either.
$38 billion in cuts that you had argued never happened.
Broken Window Fallacy always applies because it is discussing opportunity cost
Regardless of what it does or does not discuss, it doesn't apply (or much less so) during an economic bust because opportunity cost is low. Why is opportunity cost low, because opportunity in general is very low. You cannot have high opportunity cost when there are little to no opportunities available....thus high unemployment.
Your argument is moot. Whether you accept this or not, is up to you.
The economy bust is not due under consumption, it is malinvestment and over consumption due to inflation and credit.
Our current economic crisis is most certainly due to the lack of demand. People are not buying cars as they once did, people are not buying houses as they once did, and they are not investing as they once did, thus the stock market decline. Mal-investment only becomes relevant when it results in a drop in demand.
Mises
A belief re-affirming think-tank, excellent. Essentially the church of liassez-faire proponents. As with other organizations dedicated to supporting a particular ideology one must doubt it's objectivity.
I'll bite. I actually read the article, and the argument that is made is actually a red herring, the author's main argument seems to be that there was a 10 year drought on lake mead. That a drought occurred on the lake created by the Hoover Dam, is completely irrelevant to the economic output of the hoover dam. This is a non-argument.
Here are the facts:
-The Hoover dam employed some 5,200 people during one of the highest points of unemployment in U.S. history.
-The Hoover dam generates 4 billion kilowatt-hours of hydroelectric power.
-The Hoover dam attracts some 7 million tourists from around the world every year.
.
.
.
.
Your argument thus far has been that this has diverted opportunities from elsewhere, but cannot tell me where. Your argument is starting to look more and more like faith.
Probably because there was over consumption and malinvestment.
I've already address the cause above, but regardless of why unemployment is rising it is in fact rising and to create public sector jobs when few other options are available does unequivocally help the economy. Any argument to the contrary is untenable.
Right, which is over consumption.
No, over consumption is when resource use outpaces economic growth. The poor housing market is due to the fact that Supply greatly exceeds Demand. In case you weren't aware housing prices are very low right now.
If you ignore my arguments and links, I will ignore yours.
I wasn't aware that the words "Keynesian Aggregate demand Blah blah blah" somehow constitutes an argument. It is childish and does not merit a response.
No, what we do have is a surplus of demand.
This could not be further from the truth.
"Let me first say that there is no question that a demand shortfall remains a huge part of the story of high unemployment. There continues to be a significant gap between actual and potential output, which is producing a lot of cyclical unemployment." -The Economist
If it is, then your argument does not support your conclusion. To say that the government cannot create wealth for itself because it does not generate a profit, does not support your conclusion that government cannot promote job growth. The two are unrelated.
Ok, fine, you were talking about stimulus. Actually, government spending can't stimulate the economy either.
Mises
FFF
NLV
I'm not going to argue that every government attempt to stimulate the economy has worked (of course not), but for you to argue that public sector jobs and key legislative acts have NEVER created jobs or stimulated the economy is an argument that you will lose.
You are borderlined ignorant. 1) Giving tax breaks to a business that hires a new person is an incentive to hire new people.... jacksass. Stop ragging on obama he's doing the best that he can considering the vast number of "out of the closet racists" the have shown their vast hatred since he came on the scene! Hell, i didn't hear none of this shit when Bush was fucking up trillions of dollars.
They don't create jobs, but they do stimulate the economy. The strength of an economy is almost entirely contingent on the spending patterns of the population. If people stop spending money the economy worsens. It is ultimately the middle and lower classes that will get us out of this recession. The wealthy are very good at holding on to money, that is how they became rich in the first place. If you want people to spend money give it to the poor and middle classes.
Of course he doesn't think jobs are created by legislation, but is compelled to do so by the Employment Act of 1946.
"The Congress hereby declares that it is the continuing policy and responsibility of the Federal Government to use all practicable means consistent with its needs and obligations and other essential considerations of national policy......under which there will be afforded useful employment opportunities, including self-employment, for those able, willing, and seeking to work, and to promote maximum employment, production, and purchasing power."
