Public spending and jump starting the economy

[nadinbrzezinski]

Ok folks I can't believe this needs to be 'splained but so be it... fiscal conservatives still think that a check in hand will do the trick... after all it worked so well over the last eight years

So excuse the REALLY BASIC explanation but it is needed

Lets assume for the moment I am the government. I am facing an economic crisis

My two choices are two let the free market go on in its own merry way... and perhaps put into the hands of individuals a certain ammount of money

The other is to fund infrastructure, aka the building of stuff, as well as industry

Now choice one, which we have tried now TWICE means that INDIVIDUALS best case will spend some of those funds in stuff... essentially giving a small boost to the economy (What happened the last time, lasted three months) because once that money is gone, it is gone... worst case people will just save the damn thing... IN reality a combo of this happened last time around, but the stimulus to the economy lasted, best case a quarter

Now the other choice.

I allocate money to build your local school. That creates jobs in construction, and people will build that school. After that, we need teachers, and custodians and all the support structure that goes on to keeping that school going. Medium to long term the students graduate and start paying taxes as well

Now multiply that school by the hundreds of thousands of projects that will receive moneys, ranging from your local fire department that gets a new station, that needs new trucks and crews, all the way to your local university, or as in the case of the great depression a factory that hires people.

See how the cascading effect is multiplied (There I go using the actual terms)

So here is your choice

One quarter stimulus, or years. What would you choose?

Oh and yes, this is the difference between pretty conservative, free market, modern economics and what John Maynard Keynes pushed for, leading to the New Deal

[seabeyond]

1. i bought a car, matress set, heater, washer all in one month. i did my part.

i am not spending anymore.....

[nadinbrzezinski]

2. And that is the point... why we need INFRASTRUCTURE spending

We had to buy a washer too

I had the savings in the bank.

But that is all I can do.. all you can do

Neither of us CAN BUILD THAT INFRASTRUCTURE that has that cascading effect

And unemployed people do not buy stuff, or save for that matter

[seabeyond]

3. i was ranting last night how STUPID these companies are. they have done everything to gut the

worker, send jobs away, cheapen the product.... well dumbshits, people dont have a job, cant be buying the product.

i agree.

and it needs to be done anyway.

[nadinbrzezinski]

4. One night I looked at the industrialization level of the us currently

care to guess where it is?

1930 equivalent, that is what the free market has gotten us

There is no free market

I remember having that discussion with a company rep from a company that recently failed, oh seven years ago. They went for the cheap chinese, and now they are essentially gone

Couldn't happen to a better bunch of people for personal reasons, but they are a good example, even if small... really small

[seabeyond]

5. yes

i agree. give me well made instead of disposable. i will pay the extra.

[DJ13]

6. As much money as has/is being spent

We could have paid down enough outstanding consumer debt with direct government money to already have this crisis behind us.

When the debts get paid the underlying financial instruments that are the crux of the economic crisis get retired, and thus this mess would already be mostly behind us.

[nadinbrzezinski]

7. That is classic conservative, free market

and it did not work in the 1920s and it hasn't worked so far either

The New Deal ran in current dollars over a trillion dollars

This crisis in some ways is actually worst

So I expect this to run at least 5T

In fact, when and if we get an equivalent WPA... that will run about 1T, just that aspect

The modernization of the health care system will run about 2T.

Get used to it... in the end the New Deal didn't cost us that much money, but it took a while

by the way, FYI you know how much we spend every year in Iraq? And you complaint about spending in the US?

Google it up...

[nadinbrzezinski]

8. kick

[nadinbrzezinski]

9. kick