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Stimulus vs. no stimulus

Discussion in 'Political Discussion' started by Patters, Oct 27, 2011.

  1. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    tax.com: Life Without Stimulus

    Republicans constantly remind us that the Obama stimulus--the American Recovery and Reinvestment Act of 2009--did not work. They voted against it. In the United Kingdom the government is led by Conservative Prime Minister David Cameron. His government did not adopt stimulus. Instead it boldly enacted an economic program that cut spending and raised taxes. The chart below shows the results and compares it to the U.S. experience. After three and a half years, U.S. GDP is just about returning to the pre-recession peak. That's awful. But it s far better than the U.K. where GDP is still five percent ($750 billion in US terms) below its pre-recession peak.

    [​IMG]
     
  2. DarrylS

    DarrylS PatsFans.com Supporter PatsFans.com Supporter

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    Saw that, reminds me of a "Hockey Stick"....
     
  3. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    Yeah Obama pumped up the economy. Of course the dollar is down relative to the Pound since Obama took office and the stimulus was passed.

    When Obama took office 1.38 dollars to buy a pound today 1.60 dollars to buy a pound. Dollar lost 15% of it's value vs the Pound.

    So the rest of the world disagree with you and American Liberals.
     
  4. khayos

    khayos In the Starting Line-Up

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    They just focus on the numbers the blogs feed them, don't understand monetary policy.
     
  5. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    Barack Hussein Obama

    Poster Boy President

    God Help America
     
    Last edited: Oct 27, 2011
  6. JackBauer

    JackBauer Pro Bowl Player

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    Yeah. Because when I think of forum experts on monetary policy, the first people who spring to mind are you and PF13.

    I'll have to give you guys credit, though. Your ability to make this a no-win situation for the president is nothing if not a bit shameless.
     
  7. wistahpatsfan

    wistahpatsfan Pro Bowl Player

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    #75 Jersey

    GDP, monetary value comparisons, the stock market...they're all temporary indicators. None of them matter in the long-term as we see over and over again throughout our recent history. Giving credit to the stimulus is suspect since it was enacted during one of the worst trough in the economy we have seen in a long time. Naturally, we would see a rebound after a collapse. Hard to put that on any one thing.

    Also, I cringe a bit when I see people give credit or blame to economic cycles to one President, philosophy, or anything else specifically. What we see today (or any other day) is more likely the result of a combination of the effects of prior and current administrations, the actions of other governments and other random things like events of nature, wars and accidents. Bailing out banks is not a solution, just a salve that, unless applied repeatedly, has no effect, and we should not make a habbit of bailing out banks. IMO, the money would have been better spent in a grand public works program, or not at all.

    We need another World War. What's taking so long?
     
  8. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    It's coming, Islam is rising.
     
  9. The Brandon Five

    The Brandon Five Experienced Starter w/First Big Contract

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    #75 Jersey

    I think that's a valid argument if "all other things are equal", but I am not sure that is the only explanation for the difference.

    The question that has been in my mind about the Keynesian theory lately is: if deficit spending creates economic growth, why is Greece such a basket case?
     
    Last edited: Oct 27, 2011
  10. Holy Diver

    Holy Diver Pro Bowl Player

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    #80 Jersey

    Interesting chart for sure ...

    But those claiming that the stimulus has been bad, seem to be the same people that tell you how the world is better off without Saddam Hussein. Or that without "The Surge" things would've been way wose.

    No way to prove or even chart those claims, which is why this chart is interesting and also confusing to those who live in abstract absolute althernative universes.
     
  11. Holy Diver

    Holy Diver Pro Bowl Player

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    #80 Jersey

    The answer is simple....Feta Cheese
     
  12. Real World

    Real World Moderator Staff Member

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    It never fails.

    IRAAAQ!
     
  13. Holy Diver

    Holy Diver Pro Bowl Player

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    #80 Jersey

    Imagine if there was a chart that showed you what things would look like if Saddam Hussein was still in power, or life without 'The Surge'?

    How is it that the right is able to play with your imaginary futures and point to their policy as avoidance of such things, yet when some evidence points to real data showing a democratic president possibly doing something good, you shun it?



    I know the answer, I'm just pointing out the hypocrisy.
     
  14. Real World

    Real World Moderator Staff Member

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    This is a chart for 12 year olds. There are so many other variables that matter, outside of this foolish chart. First and foremost are the fact that one country is capitalist, while the other is socialist. Then there's the angle of where each countries finances, and projected fiscal state were during the years pointed at inside this chart. On top of that, are the ramifications, long term, that auserity & stimulus have in general, nevermind to these two different nations specifically.

    None of that even gets into the fact that the "stimulus" nation in this chart, still experiences near double digit unemployment, stagnant to anemic growth, record deficits, rising real inflation (not that government manipulated, eat an ipad figure) and the potential for a double dip recession in FY 2012. All worse than prior to enacting policies that dumped, and continue to pump, trillions of dollars of borrowed money into the economy. But hey, look at this cool chart I have. It explains nothing relevant, but it sure looks cool anyway. :rolleyes:

    Austerity measures are aimed at long term stability, and sustainability. They are the harshest in the short term, as they aim to eliminate the acrual of more debt. Stimulus is an infusion of immediate cash, which is designed to aleviate existing economic pain, at the cost of adding higher levels of long term debt. So it shouldn't come as a surprise that "GDP" (what is GDP anyway?) would be higher with a stimulus policy, versus austerity in the short term. The real question is where will the austerity enacting nation be down the road, versus the country that is accumulating unsustainable amount of debt.
     
    Last edited: Oct 27, 2011
  15. patsfan13

    patsfan13 Hall of Fame Poster PatsFans.com Supporter

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    I didn't claim to be an expert on monetary policy the author of the link in the OP did.

    All I did was bring up a fact that contradicted his analysis.

    Here is the chart:

    [​IMG]



    So people voting with their money have devalued the USD vs the GBP by ~15%.

    Fact not speculation.
     
  16. sdaniels7114

    sdaniels7114 Experienced Starter w/First Big Contract

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    The chart is foolish yet the UK is a socialist nation:confused:

    Maggie Thatcher would be rolling in her grave if she was, you know, actually dead.
     
  17. Real World

    Real World Moderator Staff Member

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    My bad, they're free market capitalists over there.
     
  18. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    That's a weak argument, pf. In fact, it was Bush who introduced the weak dollar in order to make American goods cheaper. Also, most economists believe there is very little bad about a weak dollar. (I know that being during the Bush admin., I researched it because I really wanted to attack Bush on the weak dollar because it made overseas travel prohibitive. Even the fairly liberal Samuelson had nothing particularly bad to say about the weak dollar, except that it could perhaps lead to trade wars.)

    [​IMG]
     
    Last edited: Oct 28, 2011
  19. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    Britain and the U.S. are both capitalist, though Britain has more government programs than we do, such as a much more affordable and widely popular (on the both the left and the right) national healthcare program.

    Hoover and Reagan introduced tax cuts and austerity. Under Hoover, we got the Great Depression. Under Reagan, unemployment climbed to 10.8% before he raised taxes and created record deficits that gave us about 4 or 5 good years. Between Kennedy and Carter, the top marginal rate was between about 70% and 90%, with loopholes designed to direct investment into specific industries or regions of the country. Overall, that worked quite well. As the link shows, under Democrats we tended to have a lower debt to GDP ratio than under Republicans. In fact, Obama doesn't look so bad actually.

    National debt by U.S. presidential terms - Wikipedia, the free encyclopedia

    Paul Krugman argued the stimulus was not adequate, but actually growth is improving, inflation is under control (better than the conservative British inflation rate), unemployment is slowly declining (and while lower in Britain, it's actually been going up). As far as "real inflation" v. government manipulated, we need a baseline for any sort of meaningful comparison. Reagan revised the formula for inflation in 1983 to make his policies look better. Using that metric, inflation appears to be roughly the same as it was as in 2008. (Current inflation rate is 3.7% officially; in 2008 it was 4.0%. The pre-1983 method would have put inflation at 11.6% in 2008, so it's a little lower today.)

    Grandfather Inflation Report - by MWHodges

    I realize you're simply one of those guys who talks off the cuff, and doesn't have any facts or specific knowledge to back up your ideas, but you know RW you might find it fun to actually try to do some research and find some facts to support your beliefs.

    What's the evidence that austerity is an effective policy as opposed to spending and some increased taxation? If an economy improves, increased deficits become less costly over time. Even Paul Ryan's budget proposal reflects that.

    But, again, rather than just talk off the hip, why not provide some data or links to support your beliefs. If not, where do you beliefs come from? Grandpa's homespun advice?
     
    Last edited: Oct 28, 2011
  20. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    IRAQ = The Hated Bush
    (then they used to say i was obssesed with palin)

    When Michelle planted vegatables on top of the Septic Tank they were trying to find a way to Blame Bush.

    GET OUT OF AFRICA NO MORE DEAD TROOPS
     

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