Does America get "it"?

[spence]

Originally Posted by Sea Dangles

He jumped the shark when he bailed out Wall St. and it has been downhill since then. This is going to get worse....

Bush bailed out Wall Street and if Romney was president then he would have bailed out Wall Street as well. I would have, you would have. There was no choice.

What makes the economy work is a mix of supply and demand. High household debt and stagnant wage growth in the Middle Class is a massive part of the overall problem that have killed demand one the artificial credit bubble was removed.

You don't counter this simply by artificially increasing supply. Government spending is part of GDP after all and programs to help the unemployed or poor do go right back into the economy. If you cut spending too fast you risk weakening the foundation while you remodel the upstairs.

-spence

[buckman]

Originally Posted by spence

Bush bailed out Wall Street and if Romney was president then he would have bailed out Wall Street as well. I would have, you would have. There was no choice.

What makes the economy work is a mix of supply and demand. High household debt and stagnant wage growth in the Middle Class is a massive part of the overall problem that have killed demand one the artificial credit bubble was removed.

You don't counter this simply by artificially increasing supply. Government spending is part of GDP after all and programs to help the unemployed or poor do go right back into the economy. If you cut spending too fast you risk weakening the foundation while you remodel the upstairs.

-spence

No.. Making them productive individuals is how you strengthen the foundation
What we do now weakens it. We are getting to the point where soil can't support the building
Posted from my iPhone/Mobile device

[Piscator]

Originally Posted by spence

Government spending is part of GDP after all and programs to help the unemployed or poor do go right back into the economy.
-spence

And here lies the problem...........Government spending = higher taxes. Government spending is not the answer, it’s the problem...........

[Jim in CT]

Originally Posted by spence

Government spending is part of GDP after all and programs to help the unemployed or poor do go right back into the economy.
-spence

But it's not the same effect as what happens in the free market.

Let's say i choose to buy a car. I choose to trade my money for the car, and the dealership agrees to trade the car for my money. Both parties enter the contract voluntarily, and thus both parties realize an economic benefit.

I don't know why you don't grasp this, but that's not what happens with government spending. In that case, my money gets involuntarily confiscated from me in the form of taxes, and I have little to no say in how it gets spent. Furthermore, in the current environment, the welfare programs may be doing as much harm as good, as they create a sense of entitlement that many poor folks get addicted to. They are therefore willing to not work, and collect welfare instead.

That does not represent wealth creation, it is wealth reduction.

We have 40 years of empirical evidence to see what happens when you throw money at the problem of poverty. Often, poor people are not poor because of a lack of money, they are poor because of behavioral issues. Those issues may not be solved, and indeed may be exacerbated, when you hand those people a check.

[scottw]

there is a component to Obamacare that uses the data collected from the enrollees that then determines their eligibility for ALL entitlement programs available to them and either notifies them or automatically enrolls them...they have a term for it that I can't recall like "mainstreaming" or something, the intent is to make sure that everyone that they have collected data on through the new healthcare legislation is also getting every possible government benefit that they might be eligible for...it's where we're going...get used to it....some call this progress Benefits.gov

"NEW YORK (CNNMoney) -- More than one in seven Americans are on food stamps, but the federal government wants even more people to sign up for the safety net program.

The U.S. Department of Agriculture has been running radio ads for the past four months encouraging those eligible to enroll. The campaign is targeted at the elderly, working poor, the unemployed and Hispanics.

The department is spending between $2.5 million and $3 million on paid spots, and free public service announcements are also airing. The campaign can be heard in California, Texas, North Carolina, South Carolina, Ohio, and the New York metro area."


.................................................. ...........


"Welcome to USA.gov,” a website maintained by the Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS), bills itself as the “primary gateway for new immigrants to find basic information on how to settle in the United States” — featuring a prominent section for new immigrants about how to access government benefits.

“Depending on your immigration status, length of time in the United States, and income, you may be eligible for some federal benefit programs,” the Web page reads.

“Government assistance programs can be critically important to the well-being of some immigrants and their families. Frequently, however, there is a lack of information about how to access such benefits. Benefit programs can be complicated and you may be given misleading information about how they operate.”

The DHS page offers links to government websites that explain how to access benefits including food stamps, Supplemental Security Income (SSI), Medicaid, Medicare, Temporary Assistance for Needy Families (TANF) and the “official website with information on all available federal benefit programs,” with a nonworking link to Benefits.gov."

[Raider Ronnie]

I grew up a kid in the Boston inner city in the Boston (Live in Jamacia Plain, my grandfathers auto repair shops were in Roxbury mid 1960s till 1970 then Dorchester till 1984)
I saw as a kid welfare families every single day.
Back then most all of them were skinny thin people, lots down on their luck , lots victims of lack of opportunity , lots just plain stupid.
2-3 generations later most cases the only skinny people you will find in those neighborhoods are the drug attics. And the majority on the doll are proud of it and expect the handouts !
Ya.
Our welfare system betters people's lives & makes us a better society !

Originally Posted by Jim in CT

But it's not the same effect as what happens in the free market.

Let's say i choose to buy a car. I choose to trade my money for the car, and the dealership agrees to trade the car for my money. Both parties enter the contract voluntarily, and thus both parties realize an economic benefit.

I don't know why you don't grasp this, but that's not what happens with government spending. In that case, my money gets involuntarily confiscated from me in the form of taxes, and I have little to no say in how it gets spent. Furthermore, in the current environment, the welfare programs may be doing as much harm as good, as they create a sense of entitlement that many poor folks get addicted to. They are therefore willing to not work, and collect welfare instead.

That does not represent wealth creation, it is wealth reduction.

We have 40 years of empirical evidence to see what happens when you throw money at the problem of poverty. Often, poor people are not poor because of a lack of money, they are poor because of behavioral issues. Those issues may not be solved, and indeed may be exacerbated, when you hand those people a check.

Posted from my iPhone/Mobile device

[Jim in CT]

Originally Posted by Raider Ronnie

Ya.
Our welfare system betters people's lives & makes us a better society !

The late, great Daniel Patrick Moynihan was a senator from NY (Hilary took his seat when he retired). He was a very liberal Democrat. When the current welfare programs came out, Senator Moynihan caught a lot of heat when he said that these programs (which give financial incentives for destructive behavior) would mean the end of the black nuclear family. Everyone said Moynihan was a moron.

Today, 73% of black babies are born out of wedlock. Seventy three percent.

And people still claim that the solution is to hand over more cash to young single moms.

Use my taxes to fund free daycare centers so that single moms can go to school during the day so they can get a job. You don't just give them cash for doing nothing.

According to Obama and the media, that view makes me a racist hatemonger.

15 or so years Raider Ronnie. If we don't right the ship by then, we'll hit he iceberg and the ship will right itself. The longer we wait, the more severe the fix will need to be.

Actuaries have been predicting this since the baby boomers were 10 years old. This is the most forseeable, preventable crisis we have ever faced, and we did nothing to stop it. It's like we're standing on railroad tracks, watching a slow-speed train approach for 50 years, and we couldn't convince ourselves to simply step off the track. So instead, we'll get hit and deal with that. But history (and common sense) will show it would have been a whole lot easier to just step off the track.

In the meantime, put your money in cash and gold. When the inevitable happens, put it back in stocks, and make a fortune.

[justplugit]

Originally Posted by Raider Ronnie

QUOTE=Jim in CT;970517]

We have 40 years of empirical evidence to see what happens when you throw money at the problem of poverty. Often, poor people are not poor because of a lack of money, they are poor because of behavioral issues. Those issues may not be solved, and indeed may be exacerbated, when you hand those people a check.

Posted from my iPhone/Mobile device[/QUOTE]

Dollars thrown at the problem never did or never will solve this problem.
The answer is education, values and morals.
Until the parents and elders take an interest and take part in their kids education, teach the values and morals which lead to self esteem and pride in work, it will never be solved.
The ONLY thing free stuff does is buy votes and promote dependence. Anybody who believes differntly has their head in the sand.

[detbuch]

Originally Posted by spence

You don't counter this simply by artificially increasing supply.

The market cannot artificially increase supply. It costs real money to increase supply. That's why supply usually follows demand. Government, on the other hand, can artificially increase the demand for supply by increasing the stock of money too fast. This usually results in inflation. Too often, government uses inflation as a means to check somewhat the growth of debt interest and as a means to expand its size by spending for special interests and programs.

Government spending is part of GDP after all and programs to help the unemployed or poor do go right back into the economy. If you cut spending too fast you risk weakening the foundation while you remodel the upstairs.

-spence

Government spending as part of GDP does not include transfer payments such as social security, unemployment benefits, food stamps, etc. Beneficiaries of transfer payments are not currently producing anything for the payment so there is no product (other than a voting constituancy for government expansion).

Government spending on actual products that it needs to operate, and on constitutionally based services are, in the best of circumstances, paid for by taxes. These may be considered a part of GDP, but they are also a cost to the private portion of GDP and so don't actually increase it. At best, its a wash. If the private sector had to provide those services, that cost would be added to the GDP just as is the government's cost added, and the government's contribution to GDP would be replaced by the private sector. The problem arises when the government goes beyond that for which it was instituted and decides for all of us on what and how and how much it will spend money.

And when it takes on more and more responsibilities that should be left to the private sector, it demands more and more of the private sector's money to spend in ways that it wishes and shrinks what is left for the private sector to spend in ways that will sustain it and let it grow. And when it has to resort to means beyond taxation when the tax burden begins to seriously harm the private economy, it either borrows or prints money. The printing of money too quickly or beyond the private sector's means to supply causes inflation and a growth of the national debt. And that makes the use of GDP (gross national product) rather than GNI (gross national income) a more attractive way for government to hide the damage it creates by requiring larger amounts of income that will have to go into paying off larger debt which DECREASES the gross national income (GNI).

GDP that results from monetary pumping, government "stimulus," which increases the supply of money is not "real" economic growth. It is an artificial growth or rise in the GDP which causes, or is, inflationary growth which is a false increase in the wealth of a nation since it does not increase overall purchasing power. Further it causes social harm by distorting the incentive component of an economy, and creates, rather than new "products," by-products--unmotivated citizens who are given a nominal "income" without having to produce or work specifically for that income. These citizens are in fact the product purchased by government to increase its "wealth"--its size and power.