Obviously, there is nothing political about that chart. And, since economists are always right, let us speak no more of this matter. The chart stands as FACT from this day forward. For maximum prosperity, we should quickly redesign our economy to include only food stamps, infinite extended unemployment benefits, infrastructure, and free money to the states. Oh, and add in a permanent payroll tax holiday. That should do it.
I wish I were an economist. They are so smart.
My apologies if you are an economist Sackerson. Just playin.
Hi, ACO. Hang on while I download and print some money. What's good for the Government is good for me.
Gary - No offence of course, I'd be shocked if you thought I WAS an economist - I'd never have anticipated the GFC I I had been. But if you want money to get into the economy, isn't it better to give it to people who'll spend it?
Sackerson - according to many of the conservatives in the US, giving money to the poor puts it quickly into the hands of the current rich, since they (direct quote) 'are rich because they are better people'.
I agree with Gary’s attack on bang per buck (BPB). BPB is irrelevant, and for two reasons.
1. Some forms of spending APPEAR to create few jobs because the spending is in capital intensive or material intensive areas. The appearance is an illusion. That’s because such spending increases demand for capital equipment and/or materials which in turn also creates jobs. Indeed, a large majority of the cost of everything is ultimately the cost of labour. Thus it makes little difference jobs-wise what form the deficit takes.
2. There are doubtless forms of public spending that result in poor BPB because a relatively large proportion of the money is saved, i.e. doesn’t add much to aggregate demand. Giving money to banks over the last year, with said banks simply sitting on such money is a good example. But in this case the effect of such spending is relatively uninflationary, thus MORE of such spending or a bigger deficit is permissible without any inflationary effect. And the deficit does NOT COST anything in REAL TERMS: i.e. printing money is not a real cost.
However, politicians like BPB because it APPEARS to bring good value from taxpayers’ money. So unfortunately we’ll probably have to live with BPB. Destroying computers and doing all calculations with pencil and paper would do well on the BPB scale.
The arguments look complex to me, Ralph, and I'm no accountant. 8 of the bottom 9 on that bar graph are related to tax tweaks, whereas the "capital intensive or material intensive areas" you refer to ("infrastructure?") would seem to be the 3rd highest. Giving money to people who are bound to spend it, or creating/preserving jobs in construction, would seem to help get the money going round the system.
Your para 2 may be right for now, but when the economy does "recover" then the extra money thrown into the system will be inflationary, won't it; unless it's all drained back again, in which case there's the question of timing so as not to trigger further deflationary problems. Or so I read.
From "Naked Capitalism"
6 comments:
If you believe that I have some bridge infrastructure to sell you.
Obviously, there is nothing political about that chart. And, since economists are always right, let us speak no more of this matter. The chart stands as FACT from this day forward. For maximum prosperity, we should quickly redesign our economy to include only food stamps, infinite extended unemployment benefits, infrastructure, and free money to the states. Oh, and add in a permanent payroll tax holiday. That should do it.
I wish I were an economist. They are so smart.
My apologies if you are an economist Sackerson. Just playin.
Hi, ACO. Hang on while I download and print some money. What's good for the Government is good for me.
Gary - No offence of course, I'd be shocked if you thought I WAS an economist - I'd never have anticipated the GFC I I had been. But if you want money to get into the economy, isn't it better to give it to people who'll spend it?
Sackerson - according to many of the conservatives in the US, giving money to the poor puts it quickly into the hands of the current rich, since they (direct quote) 'are rich because they are better people'.
I agree with Gary’s attack on bang per buck (BPB). BPB is irrelevant, and for two reasons.
1. Some forms of spending APPEAR to create few jobs because the spending is in capital intensive or material intensive areas. The appearance is an illusion. That’s because such spending increases demand for capital equipment and/or materials which in turn also creates jobs. Indeed, a large majority of the cost of everything is ultimately the cost of labour. Thus it makes little difference jobs-wise what form the deficit takes.
2. There are doubtless forms of public spending that result in poor BPB because a relatively large proportion of the money is saved, i.e. doesn’t add much to aggregate demand. Giving money to banks over the last year, with said banks simply sitting on such money is a good example. But in this case the effect of such spending is relatively uninflationary, thus MORE of such spending or a bigger deficit is permissible without any inflationary effect. And the deficit does NOT COST anything in REAL TERMS: i.e. printing money is not a real cost.
However, politicians like BPB because it APPEARS to bring good value from taxpayers’ money. So unfortunately we’ll probably have to live with BPB. Destroying computers and doing all calculations with pencil and paper would do well on the BPB scale.
The arguments look complex to me, Ralph, and I'm no accountant. 8 of the bottom 9 on that bar graph are related to tax tweaks, whereas the "capital intensive or material intensive areas" you refer to ("infrastructure?") would seem to be the 3rd highest. Giving money to people who are bound to spend it, or creating/preserving jobs in construction, would seem to help get the money going round the system.
Your para 2 may be right for now, but when the economy does "recover" then the extra money thrown into the system will be inflationary, won't it; unless it's all drained back again, in which case there's the question of timing so as not to trigger further deflationary problems. Or so I read.
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