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pkang0202
Joined: 09 Mar 2007
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 Posted: Wed Jun 24, 2009 4:43 pm Post subject: 1st Stimulus a FAILURE |
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http://www.guardian.co.uk/business/feedarticle/8575220
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It was, potentially, the most explosive question asked at President Barack Obama's news conference. Just nine words: "Do you think you need a second stimulus package?"
Now Obama seems to pride himself on his logical nature, so the logical building blocks of the question were surely appreciated.
Consider: The president's nearly $800 billion stimulus plan was predicated on a particular economic forecast. According to that forecast, the stimulus package would prevent the U.S. unemployment rate from exceeding eight percent. (Even without the stimulus, Team Obama thought nine percent was the upper joblessness limit.)
The unemployment rate is already 9.4 percent, and Obama himself said that number will exceed 10 percent before long. Ipso facto, the stimulus package -- Obama's signature achievement as president so far -- was either too small, improperly structured, or both. To admit the need for a "second stimulus" is to admit the first one failed. |
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VanIslander
Joined: 18 Aug 2003
Location: Geoje, Hadong, Tongyeong,... now in a small coastal island town outside Gyeongsangnamdo!
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| Posted: Wed Jun 24, 2009 5:02 pm Post subject: |
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expected talking points:
- the economic mess inherited from the Republican administration was worse than thought
- the unemployment rate would have been worse without the stimulus package, maybe in the 11% range, in any event some good was done, but the road is long, the journey is hard
- many of the items in the package were said to take a year or two to kick in, and the investments made were for the future, so it'll take more time
- another stimulus package would be about finishing the job that was started, committing to seeing it through, getting it done |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Sat Jul 11, 2009 3:12 pm Post subject: |
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http://www.reuters.com/article/bondsNews/idUSN1141646620090711
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President Barack Obama said on Saturday more time was needed for his $787 billion stimulus package to work, predicting the spending would have a bigger impact on the economy later this year.
In an advanced text of his weekly radio speech, Obama said the stimulus plan approved by Congress and signed into law in mid-February "was not designed to work in four months -- it was designed to work over two years."
U.S. Treasury Secretary Timothy Geithner said it was too soon to decide whether the U.S. economy needed the help of a second-round of government stimulus to recover from recession.
"I don't think that's a judgment we need to make now, can't really make it now prudently, responsibly," he said in a taped interview with CNN that will air on Sunday.
According to a transcript provided by CNN, Geithner said the "biggest thrust" of the stimulus package signed into law earlier this year would take effect in the second half of the year.
Obama's comments follow government data showing the unemployment rate soared to 9.5 percent in June, the highest level since 1983 and above the 8 percent peak predicted by the White House when it worked with Congress to pass the package. Republicans say the stimulus plan is not working.
Obama now warns unemployment likely will top 10 percent in the coming months.
"We must let (the stimulus plan) work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity," Obama said.
He said the benefits of the plan would "accelerate greatly throughout the summer and the fall."
The continuing recession and further steep job losses are wearing away the patience of Americans and raising doubts about Obama's handling of the economy.
The share of Americans who believe the stimulus package will restore the economy slipped to 52 percent in late June, down from 59 percent two months earlier, according to a Washington Post-ABC News poll.
Vice President Joe Biden said the administration had "misread" how bad the economy was when it took office but that the stimulus package would help the economy recovery and create jobs.
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Take a look at Biden's comment that I bolded. "Misread how bad the economy was..."
ARE YOU FREAKING KIDDING ME?!?!?!
In September 26, 2008 Obama says: "We are going through the worst financial crisis since the Great Depression."
So, you say we are in the worst financial crisis since the Great Depression, and then now you say you "misread" just how bad it was going to be?
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mithridates
Joined: 03 Mar 2003
Location: President's office, Korean Space Agency
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| Posted: Sat Jul 11, 2009 3:50 pm Post subject: |
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| Isn't only 15% paid out so far? |
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bacasper
Joined: 26 Mar 2007
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| Posted: Sat Jul 11, 2009 6:32 pm Post subject: |
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| mithridates wrote: |
| Isn't only 15% paid out so far? |
I think so.
I wonder if it would be possible to repeal the bailout and save the other 85%.
pkang: does it really surprise you that Biden, Obama, Bush, Cheney, et al. are all clueless or at least act that way? |
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Ya-ta Boy
Joined: 16 Jan 2003
Location: Established in 1994
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| Posted: Sat Jul 11, 2009 9:19 pm Post subject: |
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Is it really surprising that those who opposed the stimulus all along jump on the first opportunity that comes along to claim that it failed?
The stimulus is very likely a good illustration of one of the pitfalls of democracy-- the opposition stands in the doorway and blocks up the hall so that what is done is too weak right from the start to be successful...and then they whine that it didn't work, just like they predicted all along.
Krugman, among others, said the stimulus was too small to work. Maybe he was right after all. Four months is way too short a time to be making that judgement.
I'm waiting for the opposition to claim that the crisis was no crisis at all and that the economy wasn't in any danger of completely collapsing. Sooner or later that claim will be made. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Sat Jul 11, 2009 9:30 pm Post subject: |
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| Ya-ta Boy wrote: |
The stimulus is very likely a good illustration of one of the pitfalls of democracy-- the opposition stands in the doorway and blocks up the hall so that what is done is too weak right from the start to be successful...and then they whine that it didn't work, just like they predicted all along. |
I think you have it backwards. Proponents of the stimulus had better justify it in the face of this: Debt Clock
And Obama spent us into a $1.7 trillion deficit, which is well over 10% of U.S. GDP.
Some of the opposition is honestly concerned, has been concerned well before Obama came into office, and would be no matter whether the President had a -D or an -R next to his name. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Sat Jul 11, 2009 10:28 pm Post subject: |
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| Kuros wrote: |
| Ya-ta Boy wrote: |
The stimulus is very likely a good illustration of one of the pitfalls of democracy-- the opposition stands in the doorway and blocks up the hall so that what is done is too weak right from the start to be successful...and then they whine that it didn't work, just like they predicted all along. |
I think you have it backwards. |
That is what happens when you inhabit an alternative universe. Yat, step back through the looking glass. |
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Tiger Beer
Joined: 07 Feb 2003
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| Posted: Sun Jul 12, 2009 4:09 am Post subject: |
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When you had 8 years of NO domestic focus whatsoever, and watching everything slide down to nothingness...a stimulus package to get it going simply isn't going to reverse it within 4 months. IF that were even possible, we'd have the greatest country of all time. Just destroy yourself for 8 years, push a button, and back to perfect health in 4 months.
To the details. First off, most of that money is to invest in future technologies and industries that will later get America back on track. It is also going to rebuild deteriotating bridges and infrastructure that eventually needs to be repaired regardless anyways.
The 'check in the mail' concept of Bush's stimulus packages is a bit different. An investment in the future oriented one, one that must be done anyways and for the long-term best interest of all of us, doesn't simply 'stimulate' the economy in 4 months time and everyone is once again living well beyond their means again. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Sun Jul 12, 2009 4:48 am Post subject: |
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Economic Stimulus Package is a misnomer.
There are Billions of dollars in that Stimulus Bill that had NOTHING to do with stimulating the Economy.
I would like anyone to try and prove otherwise. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Jul 12, 2009 6:48 am Post subject: |
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Tiger Beer, no. The stimulus is not to "to invest in future technologies and industries". Also, it is being distributed by political affiliation. Those regions that more strongly supported Obama are getting more "stimulus".
http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html
The American economy will shrink by 15-20% and possibly more, from peak (20005-6). Stimulus can not change this.
It was a debt boom. The GDP growth was borrowed output from the future. As such, future output will be less for two reasons 1) each new unit of debt now decreases GDP (the marginal productivity of debt is in the negative) and 2) future output will be constrained by servicing debt. Also, the cap and tax is suicide and honestly makes me miss Bush. And keeping the banks alive no matter what and allowing Goldman's and the Fed to game equity/bond markets. It's over. That "stimulus" can fix this is an absolutely joke. Ya-ta, your boy Krugman advocated for Greenspan to blow a housing bubble in 2002. He has absolutely no credibility. I think he might actually be low IQ. Have you ever seen him? That dumb, empty look on his face all the time I think suggests a guy who way over his head. He won the Nobel cause he was hard on Bush.
Add to the above the huge fiscal catastrophe and demographic problems and it isn't pretty. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Sun Jul 12, 2009 7:10 am Post subject: |
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| mises wrote: |
| I think he might actually be low IQ. |
That's funny in two ways. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Jul 12, 2009 7:25 am Post subject: |
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| RufusW wrote: |
| mises wrote: |
| I think he might actually be low IQ. |
That's funny in two ways. |
Cause you are unable to see how completely wrong he is making you even lower than him? |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Jul 12, 2009 7:30 am Post subject: |
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Here's the idiot speaking over the years:
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http://www.pkarchive.org/global/welt.html
"During phases of weak growth there are always those who say that lower interest rates will not help. They overlook the fact that low interest rates act through several channels. For instance, more housing is built, which expands the building sector. You must ask the opposite question: why in the world shouldn't you lower interest rates?"
May 2, 2001
http://www.pkarchive.org/column/5201.html
I've always favored the let-bygones-be-bygones view over the crime-and-punishment view. That is, I've always believed that a speculative bubble need not lead to a recession, as long as interest rates are cut quickly enough to stimulate alternative investments. But I had to face the fact that speculative bubbles usually are followed by recessions. My excuse has been that this was because the policy makers moved too slowly -- that central banks were typically too slow to cut interest rates in the face of a burst bubble, giving the downturn time to build up a lot of momentum. That was why I, like many others, was frustrated at the smallish cut at the last Federal Open Market Committee meeting: I was pretty sure that Alan Greenspan had the tools to prevent a disastrous recession, but worried that he might be getting behind the curve.
However, let's give credit where credit is due: Mr. Greenspan has cut rates since then. And while some of us may have been urging him to move even faster, the Fed's four interest-rate cuts since the slowdown became apparent represent an unusually aggressive response by historical standards. It's still not clear that Mr. Greenspan has caught up with the curve -- let's have at least one more rate cut, please -- but the interest-rate cuts do, cross your fingers, seem to be having an effect.
If we succeed in avoiding recession, this will mark a big win for let- bygones-be-bygones, and a big loss for crime-and-punishment. And that will be very good news not just for this business cycle, but for business cycles to come.
July 18, 2001
http://www.pkarchive.org/economy/ML071801.html
"KRUGMAN: I think frankly it's got to be -- business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been (UNINTELLIGIBLE).
DOBBS: We see, Paul, housing at near record levels, we see automobile purchases near record levels. The consumer is still very much in this economy. Can he or she -- or I should say he and she, can they bring back this economy?
KRUGMAN: Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don't know"
August 8^th 2001
http://www.pkarchive.org/economy/ML082201.html
"KRUGMAN: I'm a little depressed. You know, inventories, probably that's over, the inventory slump. But you look at the things that could drive a recovery, business investment, nothing happening. Housing, long-term rates haven't fallen enough to produce a boom there. The trade balance is going to get worst before it gets better because the dollar is still very strong. It's not a happy picture."
August 14, 2001
http://www.pkarchive.org/column/81401.html
"Consumers, who already have low savings and high debt, probably can't contribute much. But housing, which is highly sensitive to interest rates, could help lead a recovery.... But there has been a peculiar disconnect between Fed policy and the financial variables that affect housing and trade. Housing demand depends on long-term rather than short-term interest rates -- and though the Fed has cut short rates from 6.5 to 3.75 percent since the beginning of the year, the 10-year rate is slightly higher than it was on Jan. 1.... Sooner or later, of course, investors will realize that 2001 isn't 1998. When they do, mortgage rates and the dollar will come way down, and the conditions for a recovery led by housing and exports will be in place.
October 7, 2001
http://www.pkarchive.org/economy/ML071801.html
"Post-terror nerves aside, what mainly ails the U.S. economy is too much of a good thing. During the bubble years businesses overspent on capital equipment; the resulting overhang of excess capacity is a drag on investment, and hence a drag on the economy as a whole.
In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer. But it seems inevitable that there will also be a fiscal stimulus package"
Dec 28, 2001
http://www.pkarchive.org/column/122801.html
"The good news about the U.S. economy is that it fell into recession, but it didn't fall off a cliff. Most of the credit probably goes to the dogged optimism of American consumers, but the Fed's dramatic interest rate cuts helped keep housing strong even as business investment plunged." |
http://blog.mises.org/archives/010153.asp
And when you run out of "lower interest rates" just borrow and/or print the money and throw it at the economy. That's Krugman. Making the exact same noise for his entire career, regardless of how permanently and totally his silly little low iq musings totally destroy the economy. Krugman can't learn. |
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RufusW
Joined: 14 Jun 2008
Location: Busan
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| Posted: Sun Jul 12, 2009 7:50 am Post subject: |
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| Tiger Beer wrote: |
| When you had 8 years... watching everything slide down to nothingness...a stimulus package to get it going simply isn't going to reverse it within 4 months. |
Absolutely +1 for this, the majority of stimulus won't be spent for a while yet. |
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