Why should I? The example I gave was the tremendous amount of increased spending in 2008 and that it had minimal impact on the recession for a couple of years. 1929 was a completely different situation. For starters Marriner Eccles did not take over the Fed until 1934.
What’s the matter - if you admit that the hated Obama did a better job than Bush your head would explode?
Here is an article on exactly this.
The first chart shows average yearly job growth, Bush (160K) versus Obama (1,3 million).
Ah, but you are penalizing Bush for the 2001 recession, you say. Fair enough - the second chart gives the data with a one year lag - that is, not counting the first year of the administration, which the president shouldn’t be blamed for,
Here, it is -141K for Bush (yes, negative) versus 1.9 million for Obama.
Now, maybe Bush shouldn’t be blamed for the recession - we all know, after all, that it was caused by poor people forcing rich bankers to give them mortgages. So, the article took it out.
Without it, total job growth was 5.6 million for Bush and 13.6 million for Obama.
Now, this article was from last January, but plenty of jobs have been created since then so it looks even worse for your boy.
Maybe you guys should add job growth denial to climate denial in your bag of bullshit tricks.
You have noticed that Obama cut the deficit significantly, right? I agree that we should be running a surplus in good times (though I’m not sure that times are quite good enough yet) but because of infrastructure needs etc. it should be done by raising tax rates to more traditional levels. We all know how that would go over.
If your look at this government site you’ll see Obama’s deficits are still higher than any other president except Bush2’s final year.
Yes, this is essentially textbook economics. Here are some caveats.
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Pre-2008, we would do things like that and pull out of a recession. In fact it was argued that by the time Congress got around to apply fiscal stimulus, the recession was already over. Which is not to say that we had hit full employment though.
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The above is a proper response to insufficient demand. But what if we’re dealing with a supply shock? If for example the supply of Middle Eastern oil is disrupted and oil prices spike, then less input in the form of oil will lead to less output and higher prices at the same time. The term for it during the 1970s was stagflation. The authorities can try to stabilize aggregate demand under such circumstances, but countercyclic policies won’t work as well to the extent that the problem is a drop in supply. Wrong tool for the job.
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Another complication is that during the Greater and Lesser Depression, the financial industry collapsed. In both cases there was a shortage of aggregate demand, but there was also paralysis within the financial sector. You need to address that directly. In the early 1930s financial intermediation simply disappeared in vast swaths of the country (cite: Professor Bernanke). In 2007-2010, vigorous efforts by the Fed, the FDIC and the Treasury Department averted financial collapse. So a functioning financial sector is another necessary condition to consider.
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Japan. Japan applied fiscal and monetary stimulus during the 1990s, but dragged their feet on financial reform. That was the first mistake. The second is more speculative. I’m guessing that to pull yourself out of depression over a reasonable time frame, you need to convince the private sector that your monetary policy is truly expansionary. That means either setting the interest rate far below the inflation rate, or promising greater inflation in the future so CEOs are afraid that if they don’t increase capacity they will miss out on a big boom. At any rate, it appears that strong fiscal policy with wavering monetary policy is consistent with insufficient stimulus. So both wings of the government need to go in big.
Today, core inflation is less than 2% (PCE). It fluctuated between 3% and 5% during the late 1980s and early 1990s. Were there lots of complaints about inflation then? No. We need to increase our inflation target from 2% to something higher: that would increase the effectiveness and the anticipated effectiveness of monetary policy. (Or we could adopt nominal GDP level targeting: see the Hellestal threads.) We should be preparing for the next recession now. On the fiscal side, strengthening automatic stabilizers should be added to our national to-do list.
You appear to be mistaken, that site indicates that Bush2’s FY2008 budget resulted in a -458.6B total federal government current dollar deficit and Bush2’s final budget for FY2009 resulted in -1,412.7B, both of which are more negative than the -438.4B FY2015 deficit.
The FY2009 started on October 1, 2008. So you are putting that ENTIRE deficit on Bush2 for the 3.75 months he was in office that year? Second of all, that is not the President’s budget. It is a record of all the spending and revenue of the Federal government so FY2009 would include 8.25 months of Obama’s spending as well.
I, of course, made no such claim. Kindly defend your own claim rather than mischaracterizing mine.
When you made the claim that “…Obama’s deficits are still higher than any other president except Bush2’s final year.” did you intend to place the ENTIRE responsibility for the FY2009 deficit on Obama? Even though Bush2 signed off on the budget and, as you point out, it went into effect before the election even took place?
That’s the thing though; times are never good to run a surplus, or even a balanced budget. Politicians always find one reason or another for the government to spend more than it receives. This is especially so when they have a bastardized economic theory to rely on which gives intellectual cover to run deficits.
[QUOTE=Saint Cad]
If your look at this government site …
[/QUOTE]
Nice report. Did you look at it? Looking at it I see that 2014 Federal spending was about the same level as 2008 spending as a percent of GDP. Discretionary spending in the Obama 2014 year was significantly less than in the Bush 2008 year — but Obama’s budget required more mandatory spending, e.g. Social Security. Do you need a cite for the demographic reason why SocSec is now running deficits? (Darn that Obama! I thought he promised he was gonna drag Granma away to the death camp!)
The same report (thanks again, Saint Cad) showed that Truman’s 2nd term (the first term shown in the report) had lower federal government receipts as a percent of GDP than any term since …* until we get to Obama’s 1st term*! That’s right, federal government receipts as a percent of GDP were lower during 2009-2013() than in any term since the charts started in 1948!*
(* - I’ve deliberately specified a five-year range: you get the same result whichever way you try to cherrypick it into a 4-year range.)
Oh? Perhaps I shouldn’t spoil your happy fuzzy feeling with clear facts, but “Politicians” isn’t very specific. We’ve posted links at least a dozen times to allow you to compare deficit spending under LBJ, Carter, and Clinton with deficit spending under Reagan, Bush-41 and Bush-43. Did you ever click any of these links?
I forgot. It’s an axiom, right there in between
A straight line segment can be drawn joining any two points.andAny straight line segment can be extended indefinitely in a straight line.thatNanner, nanner, nanner. Both sides are the same.
This is why watching the first three seasons of The West Wing should be required viewing for American high school students.
Inflation would run rampant and you wouldn’t get a true sustainable recovery until businesses begin hiring people. The uncertainty and general madness of an “all-in” fiscal stimulus would create uncertainty and reticence among the employment class to hire.
In other words, minor short-term gain but major long-term damage.
P.S. the government already does the things you listed when an economic downturn occurs. They just do so with moderation to avoid shocking the markets and creating a panic of uncertainty.
This already happened not too long ago. After the recession of the early 2000s, Greenspan stimulated, deficits were ran, and everyone knows the result. Malinvestment created a housing bubble and the worst financial crisis in decades. Yes this was textbook economics, specifically Samuelson/Nordhaus. The wrong textbook. Mainstream economists were patting themselves on the back believing they had fixed the business cycle. What they did was prevent liquidation of bad investments and the corequisite purge of poor managers.
Poor managers were saved by Greenspan and Bush and poor management contributed to the 2008 collapse. This is something Samuelson ignores because he believed in crude aggregates and the homogeneity of the factors of production.
Job growth was anemic under Bush because the central planners did not save us from capitalism. They prevented natural corrections from taking place.
Contrast this with the post WWI depression. Job loss was more severe than even the Great Depression, but it was quickly nipped in the bud laissez-faire style.
Perhaps I should have been more specific. I should have said modern politicians. Going back to LBJ etc is entirely besides the point. The LBJ Government did not have the vast Govt expenditure that we do today.
Of the later politicians you cited very few ran a surplus for any sustained period, and those that did so invariably managed it through unsustainable economic growth via property and financial bubbles. The GDP measure was entirely out of kilter with reality.
Only recently has Keynesianism came back with full vengeance; mainly since 2008. Nearly a decade later and the US is still running an uncomfortably large deficit. A deficit of 3% or so at a time when we are once more probably in a bubble; when US GDP is artificially high. And for the umpteenth year in a row we are told reducing deficit spending would be a bad idea. This time next year we’ll be going through the same arguments and the same deficits. Until, at some future point a recssion or depression will hit. It’s then back to nearly 10% deficit and once again reducing it to 3% at the economic peak. Politicians are atrocious at balancing the budget. When they have an economic theory justifying their deficits they become downright dangerous.
Sheesh. If LBJ is Bronze Age, what about Clinton, mentioned in the very same sentence? Surely you’ll concede he was Iron Age at least. 
And, on the topic of “did not have the vast Govt expenditure that we do today”: ** In the very reply you just quoted I wrote " federal government receipts as a percent of GDP were lower during 2009-2013() [SIZE=“5”]than in any term since the charts started in 1948!"[/SIZE]*** :eek: :smack:
Somewhere, underneath all your hyperbole, misconstructions, confusions and inadvertant falsehoods there may be a glimmer of sense I could find some agreement with, But life is too short to bother.
Clinton is the outier. Clinton also has little bearing on our current debate. Keynesianism was at its nadir in the 1990’s. The intellectual fashion amongst economists has changed vastly since then. Keynesianism deficit spending is back. When you have intellectual backing for not cutting deficits a politician will invariably grab at it with both hands. If you doubt me then please explain why almost a decade after the 2008 crash the US(or indeed most Western economies) are nowhere close to a balanced budget nevermind a surplus? I suggest the intellectual backing of Keynesian deficit spending gives politicians cover not to cut spending or deficits.
btw just as an aside Clinton almost certainly did not produce a surplus. The national debt increased under Clinton even during his supposed surplus years. All that happened was some creative accounting resulted in what appeared to be a surplus. I do give Clinton and the Republican congress credit for increasing US debt far less than most other periods in recent years.
https://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
Clinton had a few years of technical surplus the way they do the budget numbers, but it wasn’t a real surplus because off-budget spending is significant and factored in we were in deficit every year of Clinton’s Presidency.
There may have been “jobs growth” for 72 months after the 2008 recession but jobs growth isn’t an indicator of a robust or healthy economy. A certain number of net new people enter the workforce every month (since we’re still a growing country population wise), if the number of jobs created each month is depressed then job creation isn’t keeping up with population growth which creates a situation most would describe as negative.
I know of very few people who would describe the jobs market from 2008-2010 in positive terms, it was a time of depressed wage and job growth and an increase in people leaving the work force and in underemployment.
But yes, we weren’t actually “losing jobs”, and it wasn’t as bad as the Great Depression–but that isn’t the same as it being a good time economically.
Mainstream economic theory is hardly bastardized. And given the need for infrastructure investment and near zero interest rates I think one could argue we should be running more of a deficit today. Sometimes you have to make up for stuff getting starved due to tax cuts and wars.
Much of this discussion is tangential, but I can’t let these misstatements pass.
I don’t know why you relate “jobs growth for 72 months” to “2008-2010.” The record-setting job growth was during 2010-2016.
Do you recall that the “technical surplus” that you refer to under Clinton supposedly had Greenspan alarmed that the Treasury would stop issuing long bonds ? The right-wing delusion that the Clinton era of prosperity and deficit reduction was all an illusion (or due to the GOP Congress) has been debunked over and over and over** and over**, yet, like the stooge in Whack-a-Mole, it keeps coming back.
The 2008 financial crisis was a severe test of the world economy. But just as Y2K is now often considered a fraud by the ignorati (precautions avoided calamity, so there was no calamity, so the precautions were unnecessary :smack: ), so the seriousness of the 2008 crisis is now almost forgotten.
And BTW, as I mentioned (here? in another thread?) Tripling the S&P500 index is not something that happens every day.
It is sad that these discussions almost always turn into GOP vs Democratic sniping. Rational observers might concede that neither Clinton nor Obama was essential to the Clinton prosperity or Obama recovery. But before we can graduate to that debate, we need to agree on the facts. Sheeeez.
You’re arguing against things I never said, and don’t believe.
You said, and I quote “the 2008 financial crisis was followed with…”, I was simply pointing out that whatever the jobs growth, the period in question was not considered one of robust jobs growth in general, because many jobs were lost in the crisis, and the rate of growth when they started coming back was not at first enough to keep up with net new laborers entering the work force let alone replace the people who had lost their jobs.
Many of the new jobs created during this time of low growth were also part-time and low-paying jobs, which do not do a great service in replacing high paying full time jobs.
Now, it’s actually been almost 8 years since the 2008 financial crisis started, and we are in a pretty robust jobs and economic position now. But there is a reason that for a long time it was called a “jobless” recovery. It’s because the labor participation rate was at all time lows, and that many people who were able to find jobs were unable to find full time work. The % of people who indicated they were working part time but wanted to work full time were at historic highs in the modern era.
GDP growth was also anemic, during past recessions we’ve often seen 4-5%+ GDP growth as a “rebound” effect, and we saw nothing like that after the 2008 financial crisis. In fact not once in Obama’s Presidency have we seen annual GDP growth go above 3%. And before you get your left-wing warrior sword and shield out–I’m not at all blaming Obama for this. I’m just saying there’s valid reasons, not “evil right wing conspiracy” for people finding the post-2008 recovery pretty damn anemic. We as a country have traditionally expected periods of high economic growth after recessions end, to “quickly” replace lost jobs and get long term GDP growth “back on track.” We saw essentially a “lost generation” in terms of the housing market.
Obama isn’t to blame for any of that, and in fact with another person as President it’s conceivable things would’ve been worse, maybe. The reality is the U.S. is at a point where its era of high GDP growth is over, and that’s a structural reality unlikely to change.
As for the Clinton economy–you denounced a bunch of claims I never made. All I said was that he had an “on-budget” surplus but that it wasn’t a genuine surplus because the government was still in the red for the year. The budget surplus only refers to on-budget spending, and we have large entitlement programs that aren’t part of the regular budgeting process.
I’ve never argued or claimed the 1990s economy wasn’t a robust one, and I think Bill was a good President for the economy. But I also reject categorically the asinine argument that the economy is like some game, where “good President make economy good” and “bad President make economy bad.” I think the economy and free markets are a powerful force, in which the President can often times exert very little influence. I think Presidents tend to both get far too much blame for a bad economy and far too much credit for a good one.