"US needs to break from stimulating economy" - CNN Money - New England Patriots Forums

PatriotsReign · 08-03-2011, 12:47 PM

Wow!

I was pleasantly surprised to read this article knowing it came from CNN. I agree 100% with their opinion piece on this topic.

Keep up the good work CNN!

The U.S. economy needs to break its stimulus habit

The U.S. economy needs to break its stimulus habit - Term Sheet

"Like its chemical analog (caffiene), an economic stimulus is a temporary jolt aimed at helping the economy over a rough patch, with the cost of the jolt paid for out of normal-times incomes. Unfortunately, like Paul, the U.S. has been taking economic stimuli every quarter for a decade, pretending that a sequence of temporary jolts is the same thing as economic growth. But true per-capita economic growth is the outcome of productivity-increasing innovation. You cannot engineer true economic growth by fiddling with fiscal or monetary policy or by financing excess consumption with shaky loans."

Gainzo · 08-03-2011, 01:27 PM

Quote:

Originally Posted by PatriotsReign

Wow!

I was pleasantly surprised to read this article knowing it came from CNN. For once, I agree 100% with their opinion piece on this topic.

Keep up the good work CNN!

The U.S. economy needs to break its stimulus habit

The U.S. economy needs to break its stimulus habit - Term Sheet

"Like its chemical analog (caffiene), an economic stimulus is a temporary jolt aimed at helping the economy over a rough patch, with the cost of the jolt paid for out of normal-times incomes. Unfortunately, like Paul, the U.S. has been taking economic stimuli every quarter for a decade, pretending that a sequence of temporary jolts is the same thing as economic growth. But true per-capita economic growth is the outcome of productivity-increasing innovation. You cannot engineer true economic growth by fiddling with fiscal or monetary policy or by financing excess consumption with shaky loans."

What is the solution? As the author stated this stuff has been going on for the last 10 years.

***patsfan13*** · 08-03-2011, 01:28 PM

Good article generally I would have not viewed tax cuts as a stimulant per say since as a rule lower marginal rates (including deductions in the tax code) lead to higher economic growth as shown by Freidman and others.

JackBauer · 08-03-2011, 01:34 PM

Again, for the umpteenth time, lower taxes do not necessarily correspond to higher growth.

Gainzo · 08-03-2011, 01:59 PM

Question for the Conservatives here:

What would you do to get the economy going?

***patsfan13*** · 08-03-2011, 02:08 PM

Quote:

Originally Posted by JackBauer

Again, for the umpteenth time, lower taxes do not necessarily correspond to higher growth.

Differentiate between marginal tax rates (factoring in deductions) and taxes. Government is ultimately overhead while some is necessary, if say government consumes 100% of GDP is that too much?

The question is how much government at all level should consume as a % of GDP. 20% seems a reasonable. Depending on the State the figure is getting close to 50% which is why the economy is such a mess.

mcgraw_wv · 08-03-2011, 02:20 PM

Quote:

Originally Posted by Gainzo

Question for the Conservatives here:

What would you do to get the economy going?

Allow people to make free decisions about what their wants and needs are, and how they are best met by their own decisions.

It is not my job as a government to dictate wants and needs, and therefore direct the economy.

If the nature of the cycle is that the economy is slowing down because people are saving and not spending so much, then that is the people changing society, and that's a good thing, perhaps we don't need constant growth and spending...

Maybe we are done Keeping up with the Joneses.

I know I am.

Gainzo · 08-03-2011, 02:27 PM

Quote:

Originally Posted by mcgraw_wv

Allow people to make free decisions about what their wants and needs are, and how they are best met by their own decisions.

It is not my job as a government to dictate wants and needs, and therefore direct the economy.

If the nature of the cycle is that the economy is slowing down because people are saving and not spending so much, then that is the people changing society, and that's a good thing, perhaps we don't need constant growth and spending...

Maybe we are done Keeping up with the Joneses.

I know I am.

That is all well and good but how about some details? Like it or not our elected officials make laws. Not me or you.

PatriotsReign · 08-03-2011, 02:30 PM

Quote:

Originally Posted by Gainzo

Question for the Conservatives here:

What would you do to get the economy going?

I'm not a conservative, but I believe our gov't should do very little FINANCIALLY to drive our economy. It's not the role of gov't to fix our economy by using our tax dollars to artificially inflate it.

In all honesty, there is very little anyone or any group can do to change the direction of our economy. Just look at Japan over the past 20 years. They've tried every form of gov't stimulus known with zippo for long-term results.

Even cutting corp. taxes won't change the direction of our economy if consumers;

a. Aren't willing to spend
b. Can't increase their spending due to debt/deleveraging constraints
c. Are unemployed

***patsfan13*** · 08-03-2011, 02:32 PM

Quote:

Originally Posted by Gainzo

Question for the Conservatives here:

What would you do to get the economy going?

Get rid of many of the regulations preventing Energy development, from multiple sources. EPA regulations on CO2 for example.

Phase out Ethanol subsidies (used food for eating not burned as fuel)

Go to a Flat tax ~17% eliminate all deductions other than personal deduction (same for children and adults)

Eliminate all corp taxes, tax capital gains of share holders at the same 17% as other income. This eliminates the 200B -400B + in tax compliance paid by corps. This would encourage business to invest and conduct business in the US. Businesses do not pay taxes they collect taxes and pas the cost onto the consumer.

Reform the entitlement system means testing + start privatizing the systems for the young (give the 50+ crew the option to stay with the current system). For the Federal health care system move towards Medical Savings Accounts (especially for the young) remove existing barriers for selling health insurance across state lines. Eliminate Federal requirement for services that have to be in plans leave when services to get to the consumers.

Eliminate a number of government agencies that aren't essential to reduce spending.

Get the government out of Frannie & Freddie get rid of the distortions created by the government in the real estate market.

Enforce immigration laws remove people who break the law asap. When this is accomplished expand the number of people who can enter the country legally.

Eliminate most overseas military installations.

I think this blog post my J Stossel makes a lot of sense in terms of spending:

Take A Chainsaw To The Budget - Stossel's Take Blog - FoxBusiness.com

Some of the above would need to be phased in because they are significant. The end result would be a much healthier country.