Gubment Spending Rant
#91
08-11-2009, 03:46 AM
Mike, its not that you are wrong, its just not that simple.
Lowering taxes is one way to get things moving.
And this works well in a strong economy.
It returns money to the people who will spend it.
But what use is a tax cut if your not earning?
In a weak economy one thing a government can do is inject additional capital into the economy by say commissioning some infrastructure projects.
When the economy is weak, tax take is already down.
Who are you going to sell the 1000 KLX's to?
When the economy goes quite, people spend less.
Even if they still have a job, its natural to be cautious.
The effect is business lays off the people involved in selling KLX's.
You only need to look at the second hand market to see things are tough and people aren't spending.
What is helpful is if the government were to buy some KLX's from you.
Then you wouldn't have to lay off as many staff and that’s the big issue the government is trying to avoid.
The KLX is only an example here.
And not the best one at that.
Too much tax and regulation are a disincentive for sure.
But its all about balance.
Too little tax and regulation only promote rampant greed and exploitation.
I would suggest that this is a significant reason why we are in the situation we are now in.
Are you suggesting no tax at all?
Remove all disincentive?
Leave it up to business to run everything?
Recipe for disaster.
It's about where you draw the line.
Lets just be grateful we both live in a place that makes what ever government we have some what accountable to the people.
Lowering taxes is one way to get things moving.
And this works well in a strong economy.
It returns money to the people who will spend it.
But what use is a tax cut if your not earning?
In a weak economy one thing a government can do is inject additional capital into the economy by say commissioning some infrastructure projects.
When the economy is weak, tax take is already down.
Who are you going to sell the 1000 KLX's to?
When the economy goes quite, people spend less.
Even if they still have a job, its natural to be cautious.
The effect is business lays off the people involved in selling KLX's.
You only need to look at the second hand market to see things are tough and people aren't spending.
What is helpful is if the government were to buy some KLX's from you.
Then you wouldn't have to lay off as many staff and that’s the big issue the government is trying to avoid.
The KLX is only an example here.
And not the best one at that.
Too much tax and regulation are a disincentive for sure.
But its all about balance.
Too little tax and regulation only promote rampant greed and exploitation.
I would suggest that this is a significant reason why we are in the situation we are now in.
Are you suggesting no tax at all?
Remove all disincentive?
Leave it up to business to run everything?
Recipe for disaster.
It's about where you draw the line.
Lets just be grateful we both live in a place that makes what ever government we have some what accountable to the people.
Last edited by neilaction; 08-11-2009 at 03:48 AM.
#92
08-11-2009, 03:12 PM
Dog gonnit, now you've got me sucked into this thread.
I would agree that there are some services that are best supplied by the gov't. ie. Military, law enforcement, fire protection, and infrastucture services. But after that the evidence is that the gov't fails at education, retirement, health care, welfare, and a whole host of other things.
On the issue of whether the gov't should step in and "boost" the economy by pumping money into it: There are so many flawed practices that are going on. For instance: Clunkers for cash ......... 3 billion dollars is going to buy roughly 700,000 cars. These 700,000 cars are to be destroyed. This will artificially boost the new car industry for a short period of time. But the truth is that the people that are purchasing these new cars fit into three groups. 1) Those who were planning on purchasing in the near future (stumlus or not) 2) Those who have the disposable cash to capitalize on the program. 3) Those who can't afford it and will more than likely in up with a reposession.
When the program is over the new car market will plumit. They won't be able to give a new car away, simply because they have spead up the sales of the next 9 months and compacted it in 12 weeks. So the new car economy while stimulated now will suffer down the road.
Now for the present complications: 700,000 cars destroyed. These cars are what keeps the after market in business! Students, lower income people, and other first time buyers, buy these cars! Auto service business' work on these cars! Salvage yards live off of the parts sold off these cars! So now we have taken 700,000 potential income makers away from the private sector and the gov't has paid our tax dollars to purchase them then destroy them.
Now there's a great idea!!!!!!!!
The other way to analize this situation is to think about how this senario would play out in your personal finances. Lets say that you are an average Joe with a car payment, mortgage, and the normal living expenses. Your second cousins family comes to live with you because he lost his job and you have a big house. So now you find it impossible to make ends meet while feeding two families so you go to the bank and borrow 50,000 to get you by for say a year. After a year your second cousins' daughter gets knocked up and has a kid.(living with you) He is still unemployed and has gained 90 lbs while living off of you. Now he is so obeese that he can't get a job, the daughter is having the kid and now you find out that the boyfriend is moving in too. Being the good kind hearted person that you are, you can't just kick them out so you renew the 50K loan and borrow 100k more.
Does any of this sound familiar?????? You can not spend your way out of economic disaster!! At some point there has to be a payback, and the payback just might mean bankruptcy.
Think about it. Let the guys who mismanage their money fall, then start over. There's some learning in that process. We'll all be better off in the long run.
Damn you Finger for getting this soapbox out and calling me to get on it! ; D
I would agree that there are some services that are best supplied by the gov't. ie. Military, law enforcement, fire protection, and infrastucture services. But after that the evidence is that the gov't fails at education, retirement, health care, welfare, and a whole host of other things.
On the issue of whether the gov't should step in and "boost" the economy by pumping money into it: There are so many flawed practices that are going on. For instance: Clunkers for cash ......... 3 billion dollars is going to buy roughly 700,000 cars. These 700,000 cars are to be destroyed. This will artificially boost the new car industry for a short period of time. But the truth is that the people that are purchasing these new cars fit into three groups. 1) Those who were planning on purchasing in the near future (stumlus or not) 2) Those who have the disposable cash to capitalize on the program. 3) Those who can't afford it and will more than likely in up with a reposession.
When the program is over the new car market will plumit. They won't be able to give a new car away, simply because they have spead up the sales of the next 9 months and compacted it in 12 weeks. So the new car economy while stimulated now will suffer down the road.
Now for the present complications: 700,000 cars destroyed. These cars are what keeps the after market in business! Students, lower income people, and other first time buyers, buy these cars! Auto service business' work on these cars! Salvage yards live off of the parts sold off these cars! So now we have taken 700,000 potential income makers away from the private sector and the gov't has paid our tax dollars to purchase them then destroy them.
Now there's a great idea!!!!!!!!
The other way to analize this situation is to think about how this senario would play out in your personal finances. Lets say that you are an average Joe with a car payment, mortgage, and the normal living expenses. Your second cousins family comes to live with you because he lost his job and you have a big house. So now you find it impossible to make ends meet while feeding two families so you go to the bank and borrow 50,000 to get you by for say a year. After a year your second cousins' daughter gets knocked up and has a kid.(living with you) He is still unemployed and has gained 90 lbs while living off of you. Now he is so obeese that he can't get a job, the daughter is having the kid and now you find out that the boyfriend is moving in too. Being the good kind hearted person that you are, you can't just kick them out so you renew the 50K loan and borrow 100k more.
Does any of this sound familiar?????? You can not spend your way out of economic disaster!! At some point there has to be a payback, and the payback just might mean bankruptcy.
Think about it. Let the guys who mismanage their money fall, then start over. There's some learning in that process. We'll all be better off in the long run.
Damn you Finger for getting this soapbox out and calling me to get on it! ; D
Last edited by vfrpilot; 08-11-2009 at 04:57 PM.
vote him outta office...lol
#94
08-11-2009, 04:57 PM
Posts #91 and #92 hit the nail on the head. . . thank you neilaction and vfrpilot! As congress has lowered taxes, over the years, I kept wondering HOW they were going to keep funding the gov't programs that these taxes pay for. Yes, yes SOME of these programs pay for fat slobs to sit in front of the TV and watch Oprah (all the time getting fatter!). Those programs should go bye, bye! You can't lower taxes year after year and expect the funding for worthwhile programs NOT to eventually dry up! Government waste, lazy folks, and overpopulation are the problems. . . . and lobbyists (and ex-congresspersons BECOMING lobbyists) is the MAIN problem with how our government works! The founding fathers of this nation did NOT create a branch of gov't titled "Influence-peddling sons of bitches" and HOW the citizens of this nation allowed this to occur is beyond me. . . . .
I run a one-man auto repair/maintenance business. . . . . Don't even get me started on "Cash for Clunkers"! Vfrpilot is EXACTLY correct on how this affects those of us doing this work and how LITTLE this program will help the new-car business. It provides NO help to those poor, working, low-income folks trying to keep body and soul together. . . . f*cking government. . . . .
I run a one-man auto repair/maintenance business. . . . . Don't even get me started on "Cash for Clunkers"! Vfrpilot is EXACTLY correct on how this affects those of us doing this work and how LITTLE this program will help the new-car business. It provides NO help to those poor, working, low-income folks trying to keep body and soul together. . . . f*cking government. . . . .
#95
08-11-2009, 05:54 PM
Neil, you mentioned the great depression and how it was made worse by government inaction. Many economists now believe that it was actually government involvement that turned an otherwise cyclic economic slump into the "great" one. Here's some reading on the matter:
http://newsroom.ucla.edu/portal/ucla...sion-5409.aspx
Note this was published long before the economic bust last year and before all these stimulus were being proposed, so this is not political spin. Here's a telling quote from the article:
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."
Guess what Obama just forced through into law this spring?
That brings up the bailouts too. The economy is very complex and no one really knows all the ripple effects that result from artificial poking and pushing at various points along the chain. It can be viewed similarly to a forest, though. Forest health is complex but every so often fires are necessary to keep them healthy. This seemingly destructive thing, fires, are actually extremely beneficial and necessary to the health of the forest. It's only when man interferes and doesn't allow the fires to take their natural course that we end up with disastrous huge wide ranging fires like happened in Yellowstone not too long ago. That was a direct result of human intervention in the natural course of the forests. The cyclic fires generally sparked by lightning don't completely wipe out and destroy healthy trees and growth, but instead are more like "surface fires" that clear out the underbrush and unhealthy trees and deadwood taking up space and sunlight which stifle forest growth. But after the surface fires sweep through and clear out the junk, and the forest is actually healthier afterwards and will continue to grow and be strong.
The economy is similar and cyclic economic down-turns are like the fires. But the government propping up failing companies with bail-outs is exactly like human intervention in the natural course of the forest. Let those rotting deadwood companies that would otherwise fall under their own weight tumble, that is how it should be. How can any company not being propped up by the feds possibly compete with a mismanaged company that is too greedy and inefficient to survive on its own? Bail outs are going in the exact opposite direction if you want a healthy economy and the government is coming in and artificially attaching guy wires and expensive structural supports to keep them up at the expense of all the potential competitors that would otherwise naturally take their place and make for an overall more robust and stronger economy.
Will their failure hurt? Sure it will. But many economists believe the pain will be short-term, and the recovery will be swift as other more competitive and efficient companies move in to take their place. But by bailing out the greedy and inefficient companies that are "too big to fail," it just maintains the status quo and ensures that they continue to stifle and drive out actual entrepreneurial businesses that are beneficial and even *essential* to a healthy economy.
Here's another quote from the above article:
"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."
-UCLA-
Cash for Clunkers is yet just the latest in illadvised government involvement. They should just keep their stupid stinky fingers out of things they don't know anything about. The arrogance of lawmakers is completely out of control. And we all get to pay the price for their idiocy. I'm not saying government doesn't have its place, but when they imbalance the feedback mechanism that naturally generates the desired response and replace it with an artificial one, only an idiot would think the outcome will be the actual desired response. At best, they don't know what the hell is going to happen, and at worst, it will be exactly opposite what they thought it would be. I will repeat, yes, the road to Hell *is* paved with good intentions. But it leads to Hell nonetheless.
Oh, and +1 to vfrpilot - damn you Finger Mullet.
http://newsroom.ucla.edu/portal/ucla...sion-5409.aspx
Note this was published long before the economic bust last year and before all these stimulus were being proposed, so this is not political spin. Here's a telling quote from the article:
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."
Guess what Obama just forced through into law this spring?
That brings up the bailouts too. The economy is very complex and no one really knows all the ripple effects that result from artificial poking and pushing at various points along the chain. It can be viewed similarly to a forest, though. Forest health is complex but every so often fires are necessary to keep them healthy. This seemingly destructive thing, fires, are actually extremely beneficial and necessary to the health of the forest. It's only when man interferes and doesn't allow the fires to take their natural course that we end up with disastrous huge wide ranging fires like happened in Yellowstone not too long ago. That was a direct result of human intervention in the natural course of the forests. The cyclic fires generally sparked by lightning don't completely wipe out and destroy healthy trees and growth, but instead are more like "surface fires" that clear out the underbrush and unhealthy trees and deadwood taking up space and sunlight which stifle forest growth. But after the surface fires sweep through and clear out the junk, and the forest is actually healthier afterwards and will continue to grow and be strong.
The economy is similar and cyclic economic down-turns are like the fires. But the government propping up failing companies with bail-outs is exactly like human intervention in the natural course of the forest. Let those rotting deadwood companies that would otherwise fall under their own weight tumble, that is how it should be. How can any company not being propped up by the feds possibly compete with a mismanaged company that is too greedy and inefficient to survive on its own? Bail outs are going in the exact opposite direction if you want a healthy economy and the government is coming in and artificially attaching guy wires and expensive structural supports to keep them up at the expense of all the potential competitors that would otherwise naturally take their place and make for an overall more robust and stronger economy.
Will their failure hurt? Sure it will. But many economists believe the pain will be short-term, and the recovery will be swift as other more competitive and efficient companies move in to take their place. But by bailing out the greedy and inefficient companies that are "too big to fail," it just maintains the status quo and ensures that they continue to stifle and drive out actual entrepreneurial businesses that are beneficial and even *essential* to a healthy economy.
Here's another quote from the above article:
"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."
-UCLA-
Cash for Clunkers is yet just the latest in illadvised government involvement. They should just keep their stupid stinky fingers out of things they don't know anything about. The arrogance of lawmakers is completely out of control. And we all get to pay the price for their idiocy. I'm not saying government doesn't have its place, but when they imbalance the feedback mechanism that naturally generates the desired response and replace it with an artificial one, only an idiot would think the outcome will be the actual desired response. At best, they don't know what the hell is going to happen, and at worst, it will be exactly opposite what they thought it would be. I will repeat, yes, the road to Hell *is* paved with good intentions. But it leads to Hell nonetheless.
Oh, and +1 to vfrpilot - damn you Finger Mullet.
OK, I'm in.
Most people have on overly simplistic view of things, including the economy.
A government stimulating the economy is not only a good idea, it is essential.
The only debate is by how much.
The fundamental problem facing a declining economy is the rising unemployment.
People who don't work don't spend which puts more people out of work.
It spirals down and down until you enter a depression.
The economy grinds to a halt as people don't have enough money to spend and those that do don't spend it.
Enter the government.
The great depression was made far worse than it needed to be due to government inaction. Or should I say not enough action as they did do some things.
Most people have on overly simplistic view of things, including the economy.
A government stimulating the economy is not only a good idea, it is essential.
The only debate is by how much.
The fundamental problem facing a declining economy is the rising unemployment.
People who don't work don't spend which puts more people out of work.
It spirals down and down until you enter a depression.
The economy grinds to a halt as people don't have enough money to spend and those that do don't spend it.
Enter the government.
The great depression was made far worse than it needed to be due to government inaction. Or should I say not enough action as they did do some things.
Last edited by Nobrakes; 08-11-2009 at 08:42 PM.
#96
08-11-2009, 07:35 PM
Originally Posted by nobrakes
The economy is similar and cyclic economic down-turns are like the fires. But the government propping up failing companies with bail-outs is exactly like human intervention in the natural course of the forest. Let those rotting deadwood companies that would otherwise fall under their own weight tumble, that is how it should be. How can any company not being propped up by the feds possibly compete with a mismanaged company that is too greedy and inefficient to survive on its own? Bail outs are going in the exact opposite direction if you want a healthy economy and the government is coming in and artificially attaching guy wires and expensive structural supports to keep them up at the expense of all the potential competitors that would otherwise naturally take their place and make for an overall more robust and stronger economy.
Will their failure hurt? Sure it will. But many economists believe the pain will be short-term, and the recovery will be swift as other more competitive and efficient companies move in to take their place. But by bailing out the greedy and inefficient companies that are "too big to fail," it just maintains the status quo and ensures that they continue to stifle and drive out actual entrepreneurial businesses that are beneficial and even *essential* to a healthy economy.
Will their failure hurt? Sure it will. But many economists believe the pain will be short-term, and the recovery will be swift as other more competitive and efficient companies move in to take their place. But by bailing out the greedy and inefficient companies that are "too big to fail," it just maintains the status quo and ensures that they continue to stifle and drive out actual entrepreneurial businesses that are beneficial and even *essential* to a healthy economy.
And NOW it's back to "business as usual" with the bankers raking in HUGE bonuses, again. They say that they have to pay these obscene bonuses in order to retain their top talent. . . . the same greedy, dumb asses who got us into the mess we're in? The Gov't should have made certain that these firms failed! Allow the "forests" to renew themselves, I say!
Last edited by Nobrakes; 08-11-2009 at 08:55 PM. Reason: sorry magoo, just a quick edit to make your quote reflect my latest edit since I updated what you quoted ...
#99
08-12-2009, 02:05 AM
So, you don't think we should fight forest fires?
Regardless of the consequences, just let it burn?
There will be a human cost but if that’s your view, fair enough.
And if that is your view then I understand the minimal government involvement in the economy stuff.
So I assume you don't think the government should have bailed out AIG?
Regardless of the consequences?
Don't get me wrong here, I see the point and in some ways I say let em go.
But, I hold a different view.
The cost of something like an AIG failure is just too great.
Not only will the human cost be too high, the cost to business would also be too high.
The net result would be an extended down turn.
Sure, in the end it will all work out and the new institutions that take its place may be better.
But the cost is just too high IMO.
Heh Brian,
If you ask 5 economists a question you will get at least 7 different answers.
Even so, I read the article you point to and to my great surprise found that in general I agree.
But that article points to bad policy as being what caused the depression to last so long and not stimulus per say.
And it seems obvious now that artificially inflating wages and reducing real competition is not the way to go.
And another thing they stuffed up then was the protectionist policy which was designed to protect US companies and farmers, but in effect stifled world trade as the other countries followed suite and it resulted in extending what was a world wide problem.
Good thing the war started heh?
No there is some serious government spending.
Do you know what the government did here?
They gave everyone $900.
An across the board no strings attached flat $900 and said go spend it.
Some people didn't spend it and some people weren't even in the country but they still got it.
Time will tell if this was a good thing or a waste of money.
They did other stuff as well like extra money for roads and schools.
I think they are trying to give every kid a computer.
Whilst I generally agree with what they are trying to do, even I hope they don't go too far.
Regardless of the consequences, just let it burn?
There will be a human cost but if that’s your view, fair enough.
And if that is your view then I understand the minimal government involvement in the economy stuff.
So I assume you don't think the government should have bailed out AIG?
Regardless of the consequences?
Don't get me wrong here, I see the point and in some ways I say let em go.
But, I hold a different view.
The cost of something like an AIG failure is just too great.
Not only will the human cost be too high, the cost to business would also be too high.
The net result would be an extended down turn.
Sure, in the end it will all work out and the new institutions that take its place may be better.
But the cost is just too high IMO.
Heh Brian,
If you ask 5 economists a question you will get at least 7 different answers.
Even so, I read the article you point to and to my great surprise found that in general I agree.
But that article points to bad policy as being what caused the depression to last so long and not stimulus per say.
And it seems obvious now that artificially inflating wages and reducing real competition is not the way to go.
And another thing they stuffed up then was the protectionist policy which was designed to protect US companies and farmers, but in effect stifled world trade as the other countries followed suite and it resulted in extending what was a world wide problem.
Good thing the war started heh?
No there is some serious government spending.
Do you know what the government did here?
They gave everyone $900.
An across the board no strings attached flat $900 and said go spend it.
Some people didn't spend it and some people weren't even in the country but they still got it.
Time will tell if this was a good thing or a waste of money.
They did other stuff as well like extra money for roads and schools.
I think they are trying to give every kid a computer.
Whilst I generally agree with what they are trying to do, even I hope they don't go too far.
#100
08-12-2009, 02:33 AM
My moot point is that companies and governments, that greedily put all their eggs in high gain hedge funds only to lose all "OUR" money in the sharp downturn are now getting bailed. No heads rolling let alone any transparency. Then they are heralded as saviours when they come up with new ways to stimulated the troubled economy. The classic of bringing forward government spending allocated for 2011-2013 so road and infrastructure projects can be started now not in two years time. This so we can keep the economy rolling along and keep people in employment. It's just putting off the inevitable? Do we just shift the budget 2 years forward, 2 years further into debt?
EXAMPLE. Hilarys Marina had a substantial $$ upgrade completed in December 2008 that took close to 6 months to complete. In March 2009 they decided they would bring forward by years, new works for the marina and consequently dug up all the work they did over the past six months and started all over again.WTF. How much money can this government waste in the name of securing jobs and economy stimulus?
EXAMPLE. Hilarys Marina had a substantial $$ upgrade completed in December 2008 that took close to 6 months to complete. In March 2009 they decided they would bring forward by years, new works for the marina and consequently dug up all the work they did over the past six months and started all over again.WTF. How much money can this government waste in the name of securing jobs and economy stimulus?
Last edited by WestOzKLX; 08-12-2009 at 02:36 AM.