I think most are using it to pay off debts, or at least that’s what they say to polsters. I’m wondering what if they sent us the money spent on invading and occupying Iraq, instead…let me get out my calculator…no, YOU do the calculation, Gozu. You’d probably be a lot more grateful.
The idea that my government sends me money so that I’ll buy someting that I probablly don’t need is, well, communistic.
The U.S. consumer needs to pay off debt and save. When my government is sending me money to buy things that I don’t need? That’s the sign of a failed economic policy.
Gee, and all along I thought this “stimulus package” was passed (overwhelmingly) by Congress. Bush is cutting checks by presidential decree now? Man, you learn something new every day on this MB!
(To be clear, I do not expect good long-term results from Bush’s policies. In fact, he and his crew seem to have been steering us down a path toward a return of stagflation.)
> That’s right, the economic policy of one decade is better reflected in the
> following decade than in the decade in which it occurs.
Cite? Are there any economists who believe this? Was there anyone in the Reagan administration who announced that the benefits of the tax cuts in the Reagan years wouldn’t be felt for ten years?
I think it’s fair to say that there must be some delay for economic policies to take effect. Whether that timeframe is a decade or not is another matter, but to the extent that a president’s policies does affect the economy*, it doesn’t start on Jan 20th when he is inaugurated.
*and it’s hard to know or measure how much effect any given policy does have
> I think it’s fair to say that there must be some delay for economic policies to
> take effect.
Read mswas’s post:
> The thing that’s funny to me is how much people dump on Reagonomics even
> though the 90s and the Oughts were both significantly more affluent than the
> 70s.
The claim is that the policies of Ronald Reagan, president from January 1981 to January 1989, caused the economy from 1990 to the present to be better than the economy from 1970 to 1979. That’s quite a delay. mswas is willing to say that the current economy is caused by Reagan’s policies twenty-five years ago, not those of, say, Clinton fifteen years ago. This isn’t even a falsifiable claim. If you can claim that the economy today was caused by policies whatever long period ago you want, you can arbitrarily choose a length of period for whatever point in time you want. If the economy in, say, 1998 is one that you like and the policies of, say, 1984 were ones that you liked, you could claim that the delay was fourteen years. On the other hand, if you didn’t like the economy of 1979 and didn’t like the policies of 1975, you could say that the delay was four years. At the very least you would have to specify a length of this delay to have this make sense. To be a falsifiable claim, you have to pick a single length for this delay.
Don’t you know? That was all because of FDR. I mean Lincoln. Really it all boils down to King George’s wise financial stewardship.
The point is there’s no such thing as a free lunch, and we’ve been borrowing from our future a hell of a lot lately. Our share is 30,000 a person! Now the truth is that that is manageable, especially spread over many years, but we have to start paying it back rather than making it worse as we are doing now. There’s no such thing as free money. Either we’re borrowing it from our future, or we’re printing money to do it. Either way it’s only an illusion.
The reason I don’t like it is because it’s another stupid “get out of jail free” card by an ignorant President. I wouldn’t mind so much if we had money to blow and weren’t so screwed, generally, but we really are. On top of all of that, we have essentially spent the last 8 years wasting time and ignoring all of the most important problems we face as a nation. I think it’s time we make some adult decisions here and make some sacrifices where needed.
Seriously, the life-blood of our ecoonomy is going through the roof now. Bush had 8 years to try to alleviate the problem and did NOTHING. We need to seriously find alternatives to oil on an Apollo project size scale. Maybe even bigger. We need to focus all of our effort there. Instead he’s buying us three month’s worth of gas. The size of the American workforce is 138 million, and at 300 dollars a worker (conservative estimate) you have 41 billion dollars. Not a drop in the bucket compared to Iraq, but really, what is? You could build at least 10 nuclear reactors for that price.
Irresponsible. Not in itself a bad idea, but it’s just that our problems are so bad that this is really only a tiny half-measure which will prove worthless before too long. If it were part of a responsible and proactive plan to secure our future then I wouldn’t mind.
They are just starting. Though, I am skeptical that the Bush administration has caused some serious economic problems. Subprime has only really been felt recently. The ripple effect will be felt over the next ten years. However, the economy as far as I can tell is pretty robust and doing well despite that bubble. The DJIA has been up and down recently. My stocks have been performing quite well. Some people win and some people lose, but from where I am sitting I see a lot of jobs. For instance, it’s hard to get a good carpenter in West Texas because the oil profits have created a huge talent vacuum in Midland/Odessa that just sucks all the skilled laborers from miles around into that town. So if you are a carpenter and need a job, get out to Texas. When I was in Albuquerque in December I saw help wanted signs everywhere. Here in New York, I see plenty of jobs and watch my friends roll out of one job and into another. The recession has hit nowhere near as hard as it did around 2001 where it legitimately was difficult to find a job for a lot of people I knew. Sure, we have inflation going on, but for most Americans that is buoyed by the fact that a good proportion of our income is spent on luxuries that can be eliminated. We barely feel the rise in the price of rice. Everyone feels the rise in gas prices certainly, but as I said, that’s creating jobs out west.
Well, it wasn’t exactly a statement of scientific fact. The point is that economic cycles take a while to sort themselves out. Ten years isn’t a long time. It’s a peculiar quirk of American culture that we believe that it is. Money is spent on things that resolve over a longer time frame. We don’t see foreclosures on homes until the interest rate spikes and variable rate mortgages rise to a level that people can no longer afford to pay. That takes a few years to start to show. People had houses at a low interest rate for three or four years, and then it takes a year or more for a bank to foreclose on the property. So either the owners sell the house to avoid foreclosure, or they simply abandon the property. Then the cycle takes a little while longer for the impact of all the new houses on the market to affect the housing prices in the region, that’s another year or two as people are not willing to accept that they may need to lop $ 100k off the price of the house they are trying to sell in order to move it. Bonds take a while to mature. People hold onto their stocks for the long term. There are any number of ways that money gets tied up so that you don’t see the true impact of what is occurring until a few years later. This is why people like to look at consumer spending, because of its immediacy. In terms of economic growth, it really depends upon what venture capitalists perceive. If VCs perceive that it’s time to start investing, the economy will grow, new businesses will start, new jobs will be created and people will have more money to spend. The dotcoms didn’t rise because of Clintons policies, they rose because of Venture Capital funds that were infused with capital in the early 90s. It takes awhile for a VC fund to become established, acquire investors, research suitable investment opportunities, see how that opportunity performs, and decide if it’s going to invest more. So if a Dotcom was funded in 96, it’s likely that it existed on the spit and bubble-gum of its founders dreams since at least 94, and the Venture Capital firm watched it for a few months before entering into the contract negotiations which also took a few months, leading up to an investment cycle that took probably close to a year. I seriously doubt that in 94, Clinton’s shrewd economic policies had already made that big of an impact.
It takes a while for the country to build up institutions. They don’t simply occur overnight. The payoff for people’s entrepreneurship comes in the longer term.
