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Wish-I-Were-Fishn

Jason Lewis & consumption vs production

63 posts in this topic

I heard Jason Lewis say the other night that people spending more money (consumption) will not have the needed effect on the economy. Instead he says we need to produce more.

I don't get it. What good does it do to produce more goods if folks don't buy them??

What I'm I missing here?

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I'm assuming you're not talking about the super model, but some talking head on TV or radio? smile I would guess he is referring to the fact that the US doesn't actually manufacture too much these days. We do consume a lot, not much conservation going on.

We got through the last depression by exporting goods to rebuild Europe didn't we? Economics is a sick religion, not a science at all.

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I heard the show that night and he was referring on ways to increase wealth . and one way was to "produce more" not "spend more"

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This is a multiple part answer, I'll try to make it brief. Consumption actually does little to spur economic growth, even if you are a firm believer in Keynsian economic theories. Pumping money into the economy is the current economic plan from the Obama administration (and previous other administrations who all apparently have never taken an economics course.) While it DOES have some small short-term affects (on demand) it does not create long term economic growth. Buying something that was already produced at the price it was set at or higher (due to the increased money supply) there is a high quantity demanded (not true demand). The second prong of this is the inflation caused by the monetary principles to increase the money supply and spur short-term economic growth.

We have become dependant on the availablity of money through horrible monetary policy set forth by the Federal Reserve, and just as equal horrible fiscal policy from our elect officials. The more money they get into our hands, the longer we keep the bandaid on our wounds. The problem we have is that our current crisis is not a flesh wound, it is a dagger to the heart. We are without question headed for major inflation, leading to hyperflation. We have set such horrible policies, that we are probably now in an interest rate trap similar to Japan in the 80's and 90's where the people become dependant and expecting the ability to get cheap money. This curbs investment, and creates a spending culture.

Production leads to innovation, competition, and labor. You can build something that people wont buy, and still create jobs. You can't consume without production, you can produce without consumption (even if it is ineffecient and at a loss). The capital was spent, labor was paid, the laborer then used that capital to CONSUME. This is the correct business cycle. Much like the housing bubble, we are creating a monetary bubble that is going to have to burst at some point. This is going to lead to one of two things. A) The economy rebounds, but we have too much money chasing too few goods (inflation) or B) You don't want to know

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Nice response.

As a society we over-extended our credit causing a housing market crash leading into a total economic breakdown. Our elected officials' solution has been to over-extend our country's credit leading to a worldwide economic breakdown. Next we continue with the downward spiral by continuing to feed the situation with programs like "stimulus packages" and "cash for clunkers." These are all short-term solutions for a long-term problem.

In the end I believe these things must run their course and all we can really do is to do our best to make it through.

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This is a multiple part answer, I'll try to make it brief. Consumption actually does little to spur economic growth, even if you are a firm believer in Keynsian economic theories. Pumping money into the economy is the current economic plan from the Obama administration (and previous other administrations who all apparently have never taken an economics course.) While it DOES have some small short-term affects (on demand) it does not create long term economic growth. Buying something that was already produced at the price it was set at or higher (due to the increased money supply) there is a high quantity demanded (not true demand). The second prong of this is the inflation caused by the monetary principles to increase the money supply and spur short-term economic growth.

We have become dependant on the availablity of money through horrible monetary policy set forth by the Federal Reserve, and just as equal horrible fiscal policy from our elect officials. The more money they get into our hands, the longer we keep the bandaid on our wounds. The problem we have is that our current crisis is not a flesh wound, it is a dagger to the heart. We are without question headed for major inflation, leading to hyperflation. We have set such horrible policies, that we are probably now in an interest rate trap similar to Japan in the 80's and 90's where the people become dependant and expecting the ability to get cheap money. This curbs investment, and creates a spending culture.

Production leads to innovation, competition, and labor. You can build something that people wont buy, and still create jobs. You can't consume without production, you can produce without consumption (even if it is ineffecient and at a loss). The capital was spent, labor was paid, the laborer then used that capital to CONSUME. This is the correct business cycle. Much like the housing bubble, we are creating a monetary bubble that is going to have to burst at some point. This is going to lead to one of two things. A) The economy rebounds, but we have too much money chasing too few goods (inflation) or B) You don't want to know

Excellent response. Thanks for taking the time to help us all out.

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our economy has turned from a material based production consumption relationship. Currently we provide services as an economic driver. examples include less farms, fewer factories, more imports less exports. Most people make money providing services from cooks to bankers. Mostly the services provided are information services, computer software, office reports etc. Our nation doesnt produce as much material items as in the past. So saying we need to produce more is a joke. We cant/wont do it.

IMHO Unions need to quit driving up labor costs so that our workers can become competitive on the world labor market. We also need to stop thinking we are worth more than we actualy are. I believe a lot of younger generations feel manual labor or working in a factory is beneath them. They want to work behind a computer instead of actualy use their bodies to produce soemthing tangible. Once this country can once again produce most of our goods we consume we will have a strong and sustainable economy.

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I am in agreement with most thing you said papabear. But one point I want to touch on is "production". Many here probably think of this in the terms of factories (which it definitely applies) but also to innovation, ideas, and service.

An honest living wage, well, thats hard to deturmine. Each person has their own wants and needs. Some of us need or wish to make more money to afford our flashy boats, trucks, guns, rods, and gps. Others are content with much, much less. Its called the marginal rate of substitution. How much leisure time are you will to substitute for work (income).

The manufacturing industry and the UNIONS specifically, have completely lost their minds. To pay somebody $50-70 dollars and hour for marginaly skilled labor (automotive assembly line) with a lifetime of benefits and pensions, is bordering on insanity. We have gone away as a country from producing because of this. The automotive industry has shown no teeth and caved to the unions. Politically they have become far too strong. Most of my friends work in skilled trades. The ones who are really good at their job and work hard, get no rewards. The others are slackers and readily laugh at the ones who do work hard. This is how you collapse an industry.

Wow I was kind of all over the map on this one..lol

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Be vary careful when you talk unions... Lets not forget about the Federal mad, State mad, County mad, City mad, Teachers whistleunions as well. These ALL have an impact on your PROPERTY TAXES and SALES taxes.

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By pumping money into the economy is generating intovation, ideas and services, Sure some of this may seem as band aids but the innovation part such as grants and schools to teach technology that is up and coming is part of this stimulus it is not just about bailing out big business its helping to create a new industry for us.

You are right about production but it would help if na sayers would not stand in the way of an upcoming industry just for spite or the lack of understanding.

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What I find funny is that while the government is pumping billions into industries on the brink of failure, the Gates/Buffet foundation is pumping their billions back into society to those who are showing true innovation.

We'll see who does a better job with their billions.

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This is a multiple part answer, I'll try to make it brief. Consumption actually does little to spur economic growth, even if you are a firm believer in Keynsian economic theories. Pumping money into the economy is the current economic plan from the Obama administration (and previous other administrations who all apparently have never taken an economics course.) While it DOES have some small short-term affects (on demand) it does not create long term economic growth. Buying something that was already produced at the price it was set at or higher (due to the increased money supply) there is a high quantity demanded (not true demand). The second prong of this is the inflation caused by the monetary principles to increase the money supply and spur short-term economic growth.

We have become dependant on the availablity of money through horrible monetary policy set forth by the Federal Reserve, and just as equal horrible fiscal policy from our elect officials. The more money they get into our hands, the longer we keep the bandaid on our wounds. The problem we have is that our current crisis is not a flesh wound, it is a dagger to the heart. We are without question headed for major inflation, leading to hyperflation. We have set such horrible policies, that we are probably now in an interest rate trap similar to Japan in the 80's and 90's where the people become dependant and expecting the ability to get cheap money. This curbs investment, and creates a spending culture.

Production leads to innovation, competition, and labor. You can build something that people wont buy, and still create jobs. You can't consume without production, you can produce without consumption (even if it is ineffecient and at a loss). The capital was spent, labor was paid, the laborer then used that capital to CONSUME. This is the correct business cycle. Much like the housing bubble, we are creating a monetary bubble that is going to have to burst at some point. This is going to lead to one of two things. A) The economy rebounds, but we have too much money chasing too few goods (inflation) or B) You don't want to know

Well put.

Also, don't forget how much of an effect having the second highest corporate tax has on business and production. As more and more contries figure this out and our cutting their corporate taxes, we will lose more of our competitive edge. The feds want to create another bubble that relies too much on consumer spending yet stifle production. This could be what they were doing with the Cash for Clunkers

Back in the 1970's, getting a credit card was tough. I think it was by the late 1980's, they made it easier to get credit cards. The coming inflation will be worse than the inflation of the 1970's because Americans are in so much debt. Our economic policy in about the last 20 some years was to by the cheap goods from producer countries while we just consume. And pass out the high credit limit credit cards to consumers.

We have been run and are being run by people with degrees who couldn't run your local bait store.

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By pumping money into the economy is generating intovation, ideas and services, Sure some of this may seem as band aids but the innovation part such as grants and schools to teach technology that is up and coming is part of this stimulus it is not just about bailing out big business its helping to create a new industry for us.

You are right about production but it would help if na sayers would not stand in the way of an upcoming industry just for spite or the lack of understanding.

Wrong on many fronts. The so called stimulus passed this year was pay backs. Relied on more borrowing and printing

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Enlighten me to why I am on the wrong track. Seems to me it is parallel to what is said of production. I dont think I was refering to any stimulis package or any particular idea/theory of digging our way out of a hole. Just a point of conversation

Stay on track just muddin up the waters sticking words in other peoples mouths.

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If there is not enough consumption, there is no point in producing. In the long run production has to equal consumption. The Keynsian solution is for the government to consume excess production through public works projects (although WW2 did the trick as well).

Increasing production without demand leads to inventory accumulation and deflation. Ask the telecom companies how much fun that was. Or Sun Microsystems, when their demand went away.

In fact that is what we had in the Real Estate thing we are going through. Everyone that could was producing houses, condos etc and the consumption of those went down. Bad results followed.

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I think the whole idea of the government pumping money into the economy to stimulate demand can be compared to the "buy now, pay later" credit card mindset...

A lot of people are beginning to question this sort of thinking after seeing where it got them in the past. In order to have a healthy economy, you need consumers with disposable income, not huge tax liabilities...

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If there is not enough consumption, there is no point in producing.

This is why unemployment numbers are a trailing economic indicator. Once the hiring trend reverses, as it is starting to, it's a sign of the economy starting to recover.

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Quote:
THE EMPLOYMENT SITUATION -- JULY 2009

Nonfarm payroll employment continued to decline in July (-247,000),

and the unemployment rate was little changed at 9.4 percent, the U.S.

Bureau of Labor Statistics reported today. The average monthly job

loss for May through July (-331,000) was about half the average

decline for November through April (-645,000). In July, job losses

continued in many of the major industry sectors.

Household Survey Data

In July, the number of unemployed persons was 14.5 million. The

unemployment rate was 9.4 percent, little changed for the second

consecutive month. (See table A-1.)

Among the major worker groups, unemployment rates for adult men (9.8

percent), adult women (7.5 percent), teenagers (23.8 percent), whites

(8.6 percent), blacks (14.5 percent), and Hispanics (12.3 percent)

were little changed in July. The unemployment rate for Asians was 8.3

percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more)

rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemploy-

ed persons were jobless for 27 weeks or more. (See table A-9.)

The civilian labor force participation rate declined by 0.2 percentage

point in July to 65.5 percent. The employment-population ratio, at 59.4

percent, was little changed over the month but has declined by 3.3 per-

centage points since the recession began in December 2007. (See

table A-1.)

The number of persons working part time for economic reasons (sometimes

referred to as involuntary part-time workers) was little changed in July

at 8.8 million. The number of such workers rose sharply in the fall and

winter but has been little changed for 4 consecutive months.

(See table A-5.)

About 2.3 million persons were marginally attached to the labor force

in July, 709,000 more than a year earlier. (The data are not seasonally

adjusted.) These individuals, who were not in the labor force, wanted

and were available for work and had looked for a job sometime in the

prior 12 months. They were not counted as unemployed because they had

not searched for work in the 4 weeks preceding the survey. (See

table A-13.)

Among the marginally attached, there were 796,000 discouraged workers

in July, up by 335,000 over the past 12 months. (The data are not

seasonally adjusted.) Discouraged workers are persons not currently

looking for work because they believe no jobs are available for them.

The other 1.5 million persons marginally attached to the labor force

in July had not searched for work in the 4 weeks preceding the survey

for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment declined by 247,000 in July. From May

to July, job losses averaged 331,000 per month, compared with losses

averaging 645,000 per month from November to April. Since December

2007, payroll employment has fallen by 6.7 million. (See table B-1.)

Employment in construction declined by 76,000 in July, about in line

with the average for the past 3 months (-73,000). Employment had de-

creased by 117,000 a month on average from November to April.

Manufacturing employment fell by 52,000 in July and has declined by

2.0 million since the recession began. In motor vehicles and parts,

fewer workers than usual were laid off in July for seasonal retool-

ing. As a result, the estimate of employment for the industry rose

by 28,000 after seasonal adjustment. In large part, July's seasonally-

adjusted increase reflects the fact that previous job cuts had been

so extensive that there were fewer workers to lay off during the sea-

sonal shutdown. Elsewhere in manufacturing, several industries con-

tinued to lose jobs in July, including machinery (-15,000) and fabri-

cated metal products (-14,000).

In July, retail trade employment declined by 44,000. Job losses in the

industry had averaged 27,000 per month over the prior 3 months. Em-

ployment in wholesale trade fell by 19,000 in July, with the majority

of the decline occurring among durable goods wholesalers.

Employment in professional and business services continued to trend

down in July (-38,000); the industry has shed 1.5 million jobs since

the start of the recession. Within professional and business services,

employment in the temporary help industry edged down in July. While

temporary help has lost 844,000 jobs since the recession began, the

declines have lessened substantially over the past 3 months.

Transportation and warehousing lost 22,000 jobs in July. Since May,

the average monthly job loss was half the average monthly decline for

November through April (-17,000 versus -34,000).

Financial activities employment continued to trend down in July

(-13,000). The average monthly decline for this industry was 23,000

over the past 3 months compared with 46,000 per month from November

through April. Since the start of the recession, the financial acti-

vities industry has lost 501,000 jobs. Employment in information de-

clined by 16,000 in July, including losses in publishing and telecom-

munications.

Health care employment increased by 20,000 in July, about in line

with the average monthly gain for the first half of this year but

down from an average monthly increase of 30,000 during 2008. Employ-

ment in lei-sure and hospitality has been little changed over the

past 3 months.

In July, the average workweek of production and nonsupervisory work-

ers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours.

The manufacturing workweek increased by 0.3 hour to 39.8 hours. Fac-

tory overtime was unchanged at 2.9 hours. (See table B-2.)

In July, average hourly earnings of production and nonsupervisory

workers on private nonfarm payrolls rose by 3 cents, or 0.2 percent,

to $18.56. Over the past 12 months, average hourly earnings have

increased by 2.5 percent, while average weekly earnings have risen

by only 1.0 percent due to declines in the average workweek. (See

table B-3.)

The change in total nonfarm payroll employment for May was revised

from -322,000 to -303,000, and the change for June was revised from -

467,000 to -443,000.

_____________

The Employment Situation for August is scheduled to be released on Friday,

September 4, 2009, at 8:30 a.m. (EDT).

Could be missing something here, but I don't see any real positive trend developing - maybe I need my rose colored glasses...

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Quote:
THE EMPLOYMENT SITUATION -- JULY 2009

Nonfarm payroll employment continued to decline in July (-247,000),

and the unemployment rate was little changed at 9.4 percent, the U.S.

Bureau of Labor Statistics reported today. The average monthly job

loss for May through July (-331,000) was about half the average

decline for November through April (-645,000). In July, job losses

continued in many of the major industry sectors.

Household Survey Data

In July, the number of unemployed persons was 14.5 million. The

unemployment rate was 9.4 percent, little changed for the second

consecutive month. (See table A-1.)

Among the major worker groups, unemployment rates for adult men (9.8

percent), adult women (7.5 percent), teenagers (23.8 percent), whites

(8.6 percent), blacks (14.5 percent), and Hispanics (12.3 percent)

were little changed in July. The unemployment rate for Asians was 8.3

percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more)

rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemploy-

ed persons were jobless for 27 weeks or more. (See table A-9.)

The civilian labor force participation rate declined by 0.2 percentage

point in July to 65.5 percent. The employment-population ratio, at 59.4

percent, was little changed over the month but has declined by 3.3 per-

centage points since the recession began in December 2007. (See

table A-1.)

The number of persons working part time for economic reasons (sometimes

referred to as involuntary part-time workers) was little changed in July

at 8.8 million. The number of such workers rose sharply in the fall and

winter but has been little changed for 4 consecutive months.

(See table A-5.)

About 2.3 million persons were marginally attached to the labor force

in July, 709,000 more than a year earlier. (The data are not seasonally

adjusted.) These individuals, who were not in the labor force, wanted

and were available for work and had looked for a job sometime in the

prior 12 months. They were not counted as unemployed because they had

not searched for work in the 4 weeks preceding the survey. (See

table A-13.)

Among the marginally attached, there were 796,000 discouraged workers

in July, up by 335,000 over the past 12 months. (The data are not

seasonally adjusted.) Discouraged workers are persons not currently

looking for work because they believe no jobs are available for them.

The other 1.5 million persons marginally attached to the labor force

in July had not searched for work in the 4 weeks preceding the survey

for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment declined by 247,000 in July. From May

to July, job losses averaged 331,000 per month, compared with losses

averaging 645,000 per month from November to April. Since December

2007, payroll employment has fallen by 6.7 million. (See table B-1.)

Employment in construction declined by 76,000 in July, about in line

with the average for the past 3 months (-73,000). Employment had de-

creased by 117,000 a month on average from November to April.

Manufacturing employment fell by 52,000 in July and has declined by

2.0 million since the recession began. In motor vehicles and parts,

fewer workers than usual were laid off in July for seasonal retool-

ing. As a result, the estimate of employment for the industry rose

by 28,000 after seasonal adjustment. In large part, July's seasonally-

adjusted increase reflects the fact that previous job cuts had been

so extensive that there were fewer workers to lay off during the sea-

sonal shutdown. Elsewhere in manufacturing, several industries con-

tinued to lose jobs in July, including machinery (-15,000) and fabri-

cated metal products (-14,000).

In July, retail trade employment declined by 44,000. Job losses in the

industry had averaged 27,000 per month over the prior 3 months. Em-

ployment in wholesale trade fell by 19,000 in July, with the majority

of the decline occurring among durable goods wholesalers.

Employment in professional and business services continued to trend

down in July (-38,000); the industry has shed 1.5 million jobs since

the start of the recession. Within professional and business services,

employment in the temporary help industry edged down in July. While

temporary help has lost 844,000 jobs since the recession began, the

declines have lessened substantially over the past 3 months.

Transportation and warehousing lost 22,000 jobs in July. Since May,

the average monthly job loss was half the average monthly decline for

November through April (-17,000 versus -34,000).

Financial activities employment continued to trend down in July

(-13,000). The average monthly decline for this industry was 23,000

over the past 3 months compared with 46,000 per month from November

through April. Since the start of the recession, the financial acti-

vities industry has lost 501,000 jobs. Employment in information de-

clined by 16,000 in July, including losses in publishing and telecom-

munications.

Health care employment increased by 20,000 in July, about in line

with the average monthly gain for the first half of this year but

down from an average monthly increase of 30,000 during 2008. Employ-

ment in lei-sure and hospitality has been little changed over the

past 3 months.

In July, the average workweek of production and nonsupervisory work-

ers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours.

The manufacturing workweek increased by 0.3 hour to 39.8 hours. Fac-

tory overtime was unchanged at 2.9 hours. (See table B-2.)

In July, average hourly earnings of production and nonsupervisory

workers on private nonfarm payrolls rose by 3 cents, or 0.2 percent,

to $18.56. Over the past 12 months, average hourly earnings have

increased by 2.5 percent, while average weekly earnings have risen

by only 1.0 percent due to declines in the average workweek. (See

table B-3.)

The change in total nonfarm payroll employment for May was revised

from -322,000 to -303,000, and the change for June was revised from -

467,000 to -443,000.

_____________

The Employment Situation for August is scheduled to be released on Friday,

September 4, 2009, at 8:30 a.m. (EDT).

Could be missing something here, but I don't see any real positive trend developing - maybe I need my rose colored glasses...

There is hiring...in government.

Besides, the OMB(?) had to revise the uemployment numbers for next year slightly upward.

We are heading for a form of stagflation. Not if, but when. The budget for 2010 is ging to be 40% borrowing. The new leader in Japan has promised to move away from our dollar. China at some point will follow

After the crash of 1929, economists and the Hoover WH were predicting the worse was over and now good times were ahead. crazy

The federal government is like a person with a credit card who takes out another card to pay off one and thinks he solved his economic woes.

I heard a line several years ago that went something like "Americans love history so much that they doom themselves to repeat it."

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From Author Mitchel Moss (07/09/09)

No matter how far the economy falters, there is always a winner. And no city does better

when the nation is at the brink of disaster than Washington, DC. Since December 2007,

when the current recession formally began, the nation has lost approximately 6 million

jobs. Only two states, Alaska and North Dakota, have lost a smaller percentage of jobs

than Washington, DC, which has seen a job loss of 0.6%, or 4,400. Simply put,

Washington has done better in this recession than 48 of the fifty states when it comes to

job performance.

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Quote:
Only two states, Alaska and North Dakota, have lost a smaller percentage of jobs

than Washington, DC, which has seen a job loss of 0.6%, or 4,400. Simply put,

Washington has done better in this recession than 48 of the fifty states when it comes to

job performance.

I'm going to guess about 99.99% of that 4,400 was in the private sector...

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The Keynesians Were Wrong Again

We won't see a return to growth without incentives for job-creating investment

By PETER FERRARA - The Wall Street Journal

From the beginning, our representatives in Washington have approached this economic downturn with old-fashioned, Keynesian economics. Keynesianism—named after the British economist John Maynard Keynes—is the theory that you fight an economic downturn by pumping money into the economy to "encourage demand" and "create jobs." The result of our recent Keynesian stimulus bills? The longest recession since World War II—21 months and counting—with no clear end in sight. Borrowing close to a trillion dollars out of the private economy to increase government spending by close to a trillion dollars does nothing to increase incentives for investment and entrepreneurship.

The record speaks for itself: In February 2008, President George W. Bush cut a deal with congressional Democrats to pass a $152 billion Keynesian stimulus bill based on countering the recession with increased deficits. The centerpiece was a tax rebate of up to $600 per person, which had no significant effect on economic incentives, as reductions in tax rates do.

Learning nothing from this Keynesian failure, which he vigorously supported from the U.S. Senate, President Barack Obama came back in February 2009 to support a $787 billion, purely Keynesian stimulus bill.

Even the tax-cut portion of that bill, which Mr. Obama is still wildly touting to the public, was purely Keynesian. The centerpiece was a $400-per-worker tax credit, which, again, has no significant effect on economic incentives. While Mr. Obama is proclaiming that this delivered on his campaign promise to cut taxes for 95% of Americans, the tax credit disappears after next year.

The Obama administration is claiming success, not because of recovery, but because of the slowdown in economic decline. Last month, just 216,000 jobs were lost, and the economy declined by only 1% in the second quarter. Based on his rhetoric, Mr. Obama expects credit for anyone who still has a job.

The fallacies of Keynesian economics were exposed decades ago by Friedrich Hayek and Milton Friedman. Keynesian thinking was then discredited in practice in the 1970s, when the Keynesians could neither explain nor cure the double-digit inflation, interest rates, and unemployment that resulted from their policies. Ronald Reagan's decision to dump Keynesianism in favor of supply-side policies—which emphasize incentives for investment—produced a 25-year economic boom. That boom ended as the Bush administration abandoned every component of Reaganomics one by one, culminating in Treasury Secretary Henry Paulson's throwback Keynesian stimulus in early 2008.

Mr. Obama showed up in early 2009 with the dismissive certitude that none of this history ever happened, and suddenly national economic policy was back in the 1930s. Instead of the change voters thought they were getting, Mr. Obama quintupled down on Mr. Bush's 2008 Keynesianism.

The result is the continuation of the economic policy disaster we have suffered since the end of 2007. Mr. Obama promised that his stimulus would prevent unemployment from climbing over 8%. It jumped to 9.7% last month. Some 14.9 million Americans are unemployed, another 9.1 million are stuck in part-time jobs and can't find full-time work, and another 2.3 million looked for work in the past year and never found it. That's a total of 26.3 million unemployed or underemployed, for a total jobless rate of 16.8%. Personal income is also down $427 billion from its peak in May 2008.

Rejecting Keynesianism in favor of fiscal restraint, France and Germany saw economic growth return in the second quarter this year. India, Brazil and even communist China are enjoying growth as well. Canada enjoyed job growth last month.

U.S. economic recovery and a permanent reduction in unemployment will only come from private, job-creating investment. Nothing in the Obama economic recovery program, or in the Bush 2008 program, helps with that.

Producing long-term economic growth will require a fundamental change in economic policies—lower, not higher, tax rates; reliable, low-cost energy supplies, not higher energy costs through cap and trade; and not unreliable alternative energy surviving only on costly taxpayer subsidies.

Unfortunately, Mr. Obama seems to be wedded to his political talking points, and his ideological blinders seem to be permanently affixed. So don't expect any policy changes. Expect an eventual return to 1970s-style economic results instead.

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Quote:
The result of our recent Keynesian stimulus bills? The longest recession since World War II—21 months and counting—with no clear end in sight.

Quote:
Ronald Reagan's decision to dump Keynesianism in favor of supply-side policies—which emphasize incentives for investment—produced a 25-year economic boom. That boom ended as the Bush administration abandoned every component of Reaganomics one by one, culminating in Treasury Secretary Henry Paulson's throwback Keynesian stimulus in early 2008.

Woooooooooooooooooooooooooooooooow.

This is what happens when writers mix blind ideology, bits & pieces of economic knowledge, poor math skills, &, I would presume, some kind of mind-altering substance.

Assuming this "25 year boom" started in 1982-83 around the end of the Reagan recession, it continued to 2007-08. And yet Bush is castigated for...ruining that supply-sidism gradually & suddenly there was a collapse due to his slow retreat from voodoo economics. What? Seriously?

Perhaps this guy missed the news that real median income has fallen over 4% between 2000-2008. What about those 7-8 years? This hasn't just been 18 months in the making. That's just stupid. This is the culmination of a decade & more of "irrational exuberance" & greed in many sectors - sectors that were allowed to run wild under the free market. horrific decisions that are still killing banks every month.

There are certainly many interesting debates of supply-side economics vs. Keynes, but this isn't one of them. This is using an ideological lens to ignore facts, stretch suspect truths, & try to score points for "your" team. Bad post.

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Ever heard of GDP?

Before taking the guns out of the holsters and shooting up the place before even seeing the target, thinking there's got to be a boogeyman in there somewhere, maybe you should re-read the article.

He's not saying it fell off the face of the earth in 2007/08 as you jumped at in an attempt to smear the article. The author is saying that the economy was good for many years but was tailing off by the time 2007/08 came around, reaching the end of the boom, and Bush/Congress wasn't doing the right things to slow down the decline. These missteps have continued into 2009 and it appears that people haven't learned from history as he points out to the open minded reader.

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