Thread: Failure of Obamanomics

Originally Posted by Porras

That's a perfectly feasible way of stimulating the economy. Hell, you don't even have to bother with the hole, just give them money, they'll spend it. That's how the economy works, the question is whether or not it would work out in a way that resulted in the economy reaching a high enough level to pay for itself.

That doesn't work. If there isn't a net gain to the system the economy worsens with handouts. If goods are coming from outside the economy then paying folks to not produce goods here means the money flows outside and creates a situation where investment outside our economy benefits those outside not those getting the handouts.

Pay one to dig a hole and plant a seed, after that you harvest and there is some gain from the labor because the work was productive.

Originally Posted by Damn Yankee

Wow. Where did you learn such tripe? Hopefully not in college.

There is an article in my local paper this morning where the writer is trying to explain how the devastation of Irene is going to stimulate the economy. If that were true, then we should go along and bulldoze perfectly good homes, then rebuild them, because that would be good for the economy. That's retarded.

Then what was WWII, a tax cut?
No, it was massive spending, 55% of GDP was spent on the war effort. Super high tax rates, super high borrowing and massive spending on something that provided no economic benefit to the economy, except massive spending.

And that is what pulled the economy out of the doldrums where it had languished since the collapse of the financial system in 1930.
Now our financial system has collapsed again, and we are in an economic doldrum, and only massive spending can get us out.

Originally Posted by goober

Hmmm, you left out the recession of 1930, called the Great Depression, which like the current situation, and unlike any of those other recessions in your chart, was caused by a collapse of the financial system.

Which (Coincidentally?) like this one, came after a period of Republican hegemony.

This is a tougher nut to crack because it is fundamentally different from those other recessions, and similar to the Great Depression.

Nothing has disproved Keynesian Economics, if anything, the paltry stimulus which people like Krugman said was too small at the time, wasn't enough to do the trick.

What has been disproved, is the theory that low tax rates create jobs and stimulate the economy.
Because where we are now is ten years after low tax rates and there really hasn't been a period of notable job creation, or exceptional economic growth.

Your hero "stimulated" the economy for nearly a decade to try and get out of the Depression. I didn't include that so as not to embarrass you.

Originally Posted by goober

Then what was WWII, a tax cut?
No, it was massive spending, 55% of GDP was spent on the war effort. Super high tax rates, super high borrowing and massive spending on something that provided no economic benefit to the economy, except massive spending.

And that is what pulled the economy out of the doldrums where it had languished since the collapse of the financial system in 1930.
Now our financial system has collapsed again, and we are in an economic doldrum, and only massive spending can get us out.

You seem to forget that prior to the US entering WWII, Britain traded away much of her wealth to the US in exchange for war material manufactured by the US. That was great for our economy, pretty crappy for theirs. *shrug*

Originally Posted by goober

Then what was WWII, a tax cut?
No, it was massive spending, 55% of GDP was spent on the war effort. Super high tax rates, super high borrowing and massive spending on something that provided no economic benefit to the economy, except massive spending.

There was a war with a defined and clear end-goal. The goal was winning the war and laying down the foundation for an enduring peace. It demonstrates pretty well you can't stimulate with no end-goal.

Originally Posted by Damn Yankee

Your hero "stimulated" the economy for nearly a decade to try and get out of the Depression. I didn't include that so as not to embarrass you.

You embarrass yourself.
The "stimulus" of the 1930's was too small to do the job, there had been some improvement, when "balancing the budget" became the concern, spending was cut back and the economy slipped.
Only the massive spending of WWII brought the economy back to life.

Originally Posted by JDJarvis

There was a war with a defined and clear end-goal. The goal was winning the war and laying down the foundation for an enduring peace. It demonstrates pretty well you can't stimulate with no end-goal.

if instead of fighting a war in europe and the pacific, we dumped all those tanks and airplanes into a giant hole, what would have been the difference in the economic impact?


Then there would still be all the jobs, all the spending, all the economic effects would have been the same.

Originally Posted by goober

You embarrass yourself.
The "stimulus" of the 1930's was too small to do the job, there had been some improvement, when "balancing the budget" became the concern, spending was cut back and the economy slipped.
Only the massive spending of WWII brought the economy back to life.

Again you choose to forget that the "massive spending" was by our allies to purchase supplies from us.

If spending money alone is so good for the economy, then theirs should have been booming.

Originally Posted by goober

if instead of fighting a war in europe and the pacific, we dumped all those tanks and airplanes into a giant hole, what would have been the difference in the economic impact?


Then there would still be all the jobs, all the spending, all the economic effects would have been the same.

If that were true, then we should go along and bulldoze perfectly good homes, then rebuild them, because that would be good for the economy.

Originally Posted by Damn Yankee

Again you choose to forget that the "massive spending" was by our allies to purchase supplies from us.

If spending money alone is so good for the economy, then theirs should have been booming.

Don't embarrass yourself further, check out how much of that spending by our allies was money we borrowed and then lent to them.
And that portion of the war budget was always fairly small compared to the the flat out war spending.