Let’s put people back to work
What would happen if the federal government sent unemployed college grads into the classroom to beef up reading, math and science instruction in elementary, middle and high schools?
What would happen if the federal government helped pay for the construction of new reservoirs or the expansion of existing ones?
What would happen if the federal government boosted worthy transportation projects — roads, bridges, rail and ports?
And what would happen if the federal government spent real money — not relative chump change — investing in solar, wind, geothermal and other forms of renewable energy?
We’d have more jobs and fewer foreclosures, that’s what. We’d also have a better quality of life and a more competitive position in the global economy.
I’m not a complete moron. I know that’s not going to happen. And I know the government has been living beyond its means for decades. More than $14 trillion in debt needs to be cut sharply to prevent robbing our kids and grandkids.
But like many things in life, the question is when? My answer is not now. Coming up with a long-term game plan is fine. But immediately making deep cuts to a fragile economy will do more harm than good.
That’s probably a minority view. And most of the CEOs I’ve interviewed for this column probably disagree with it. But, in my view, too many people have been suffering for too long in this alleged “recovery,” which began more than two years ago. They do not suffer alone. Their situation drags down the entire economy and the future of the very kids we say we want to protect.
Many moons ago, I learned a few important lessons in my economics classes:
– It took World War II to get us out of the Great Depression. It wasn’t because lots of soldiers were killed. It was because the government spent money. Lots.
– FDR understood what Herbert Hoover did not. The government needs to act differently than a family does in a crisis. The family pulls in its financial horns, as it should. The government needs to do the opposite — spend when times are tough and reap the rewards when times are good. Why?
– GDP = C + I + G. Our economy is made up of demand from three sources — consumers, business investment and government. When two of them retrench, as they have, the government needs to act boldly or the pain will last for a long time — especially after a financial meltdown.
Over the past few years, I’ve heard and read the following many times: “The government doesn’t create jobs.”
Nonsense. If the government doesn’t create jobs, then who are the soldiers in Iraq and Afghanistan working for? If the government doesn’t create jobs, who’s funding the Lockheed Martin aerospace plant here? And if the government doesn’t create jobs, why did the unemployment rate rise in June after it cut thousands?
The economy has been sick since December 2007 and it will continue to be sick for several more years.
This country can do better. We can invest in our people, grow the economy and use the revenue to cut the debt over time. Or we can continue to waste our resources by leaving millions of talented people on the unemployment line.
- Henry Unger, The Biz Beat
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99 comments Add your comment
RGB
July 19th, 2011
1:08 pm
doh,
You raised 2 interesting examples.
Gulfstream, of course, is headquartered in Savannah and its largest manufacturing plant is located there. It’s unfortunate that the President has lambasted business jet owners recently as if they were contributory to his overspending. And it was Obama’s own stimulus package that accelerated depreciation of business jets from 7 to 5 years. So Obama creates the plan and then criticizes it a couple of years later.
Regarding GE, Rush Limbaugh expressed it very well:
“Since 2009, GE has reduced its payroll by 36,000 employees. While paying no taxes on $5 billion of income, its CEO tells businesses at the US Chamber of Commerce to stop complaining about government and start hiring people while he is firing people.”
CEO Immelt is, of course, Obama’s business council job czar.
Obama knows what he’s doing: destroying the U.S. economy purposely and incrementally–a little bit every day–to punish us for our colonial ways and to instill “fairness”.
He just wants us all to be equal. Equally poor.
A dad
July 19th, 2011
1:08 pm
Typical Keynesian economics, which has been shown time and time again to fail. Look at the mess our government, both R’s and D’s, have put this country into, and you want to make them responsible for all economic development? Hmm, Microsoft, Apple, GM, Ford, Johnson & Johnson, etc. (all Fortune 500 companies). Interestingly enough, none of them were started or run by the federal gov’t.
No thanks Mr. Unger. I’d prefer to work hard (a key ingredient to success), produce something people want, sell it for a profit, and then build from there. What does the gov’t produce? Oh yeah, services. Services which need to be paid for. Bet you’re for rasing the debt ceiling too.
Danny O
July 19th, 2011
1:11 pm
Back in the late 90’s, I learned in Macroeconomics 1001 at Georgia Tech about the formula Mr. Unger cites (GDP = C + I + G). Anyone with a basic understanding of economics knows that when the government spends, it boosts the economy. And if the government spends on durable assets, such as infrastructure, we can get a boost to the economy now as well as a long term advantage of efficiency.
When we build a bridge, extend a transit line, add a runway, or fix a leaky water system we are putting folks to work now for benefits that we will all reap later. Sure, we have to pay for it over time. But that’s how you get things done, whether you’re a business, a family, or a nation.
doh
July 19th, 2011
1:12 pm
Obama’s government stimulus bill is NO different then our overbloated military budgets we have had for years. Think about it. What happened after WWI? Three Republican presidents..Harding, Coolidge and Hoover, the three most conservative presidents cut the military budget. The Washington Naval Conference cut American military spending, we promised to scrap 30 battleships and not make a new one for 10 years. That was true conservative thinking.
After WWII AND Korea, what did Truman do. Balanced the budget, cut military spending. He was the only president to ever lower the debt ceiling, truly balance a budget while lowering our deficit.
Then IKE comes into office. He, the great general and true conservative, cut military spending by 27%, and what is amazing about IKE is while he cut the military budget he didn’t cut R&D. Military technology increased during the cut.
Nixon comes to office, he cut the military budget even further, by 29%.
What is most interesting is Reagan. He comes into office and he starts spending the military budget because Carter didn’t increase it. He increases spending for the first 5 years of his presidency and then he realizes that he is hurting the economy and turns around in his 6th year and starts cutting spending. The military budget goes from 440 million in 1980 to a high of 580 million and then drops back down to 523 million.
Every Republican president has Lowered the military budget, every president that is except for one….
Little Bushy inherited a military budget of 412 billion. Clinton’s last budget allocated the least amount of money the Federal Government spends on the military, since the end of WWII. By the end of Bush’s term he leaves office spending the MOST amount of money ever on the military 718 billion. He defies history and his own party, and that is just in the military. He did the same thing in every major category in the budget. Before Bush, the highest the military budget had ever been was under Reagan…580 billion, and I remember everyone complaining that was too high, and Reagan even admitted it.
That is what Obama got. Obama received a military budget that was the highest every in recorded human history on top of an economy that was already in collapse, an unemployment rate of 7.7% and a rising debt. Obama has cut the military budget down from 717 billion down to 676 billion and it is still going down but it is nowhere near earlier levels set by Reagan, Nixon and Eisenhower of an average of 450 billion.
Here is the sad part….Bush wasn’t alone. He did this with the help of a Republican House and Senate.
So excuse me if I do not believe Republicans who say they are for small government, when take a budget that was lowest since Nixon left the White House and in just 8 years skyrocket it to the highest level it has ever been. This wasn’t just Bush’s doing, there are still Congressmen sitting in the Capital today who voted for all this, and who are now attacking Obama for not fixing the mess they helped to create.
Somewhere in the Middle
July 19th, 2011
1:32 pm
As neither a Democrat nor Republican, but an actual economist (or, as actual as that term can be applied, I guess), I thought I’d jump in. Firstly, while not disputing your theorems, I’d recommend not quoting the Cato Institute on corporate tax rates. The Cato Institute, while very skilled at promoting their agenda, is quite considerably focused on limiting government regulation on business. Which, is not necessarily a bad thing, but the view you quote them on for corporate tax rates is one slice of a view. You could break it into effective rates on equity or debt-financed investments, on new machinery or skilled labor, you would need to adjust for actual inflation, depreciation deductions, et al. The general rule of thumb, or at least as my bosses tell me, is to look at effective corporate tax rates (in total) relative to GDP (relative = as a %). Under that guideline, the U.S. has always had, and continues to have, very favorable corporate tax rates. Yet, I think your point on the effective rate against new investments was that investment is where job growth occurs. And that is, for the most part, very true. Economic cycles spike when demand is in place (demand = capital/cash in the market). From increased government spending in the 30s and 40s, to the new manufacturing capability that came out of WWII and lasted into the 1950s, to dramatic defense spending in the 1960s through the 1980s, some inorganic financial engineering in the 1980s, the internet boom of the late 1990s, through the real estate and financial services bubbles of the late 1990s and 2000s, there are key cash mechanisms that have spurred economic growth. The issues today (no spiking cash mechanism, labor arbitrage = jobs leaving the country, deficit obligations for existing programs like Medicaid and Social Security) are keeping the economy from growth. The idea of increased government spending is essentially the inorganic implementation of a cash mechanism. Private sectors grow jobs not because wealthy people have a lot of money (my apologies, no need to offend, but there is zero evidence that having more, and wealthier, wealthy people, creates jobs in any way), but because corporations have an area where they can grow. Tax breaks help there, subsidies, but most of all, demand is the key. With a reversal in the cash mechanisms in place, that demand is just not there. So, government infusion of capital into jobs would create that demand. Artificially, no argument there, but it would (or, at least, has historically) achieve that goal. The problem with government infusion is sustainability. The government infusion must be matched with a plan to move the cash mechanism into the private sector, and support the continued growth in that sector.
So, all in all, and I apologize for a rather helter skelter manner of “speaking”, economically we would (again, historically speaking) benefit from the creation of a cash/resource bubble through government spending. But it would come back to harm us (bubble bursting, just like the internet and housing) if it is not carefully evolved and migrated to the private sector.
EJ Moosa
July 19th, 2011
1:42 pm
“Private sectors grow jobs not because wealthy people have a lot of money (my apologies, no need to offend, but there is zero evidence that having more, and wealthier, wealthy people, creates jobs in any way), but because corporations have an area where they can grow.”
The private sector generates job growth when year over year profit growth rises above 6:5 %. The jobs follow four to five quarters later.
When year over year profit growth falls below this mark, the economy sheds jobs in the same fashion.
It’s not rocket science. It’s simple cause and effect. Unfortunately, too many economists and politicians have made it difficult to discern the truth.
Politicians use economists as they try to cherry pick who gets the subsidies and tax advantages and who does not. It’s pretty obvious to every one but the politicians and economists that they have been a big failure.
Stinger
July 19th, 2011
1:45 pm
Mr. Unger, the problem is we have already spent to much…we can’t add more on top of it…have you done the numbers…do you realize how much 14+ trillion is? These rewards in good times, you are referring to..do you know how many years of good times(defined by the government collecting more than it needs to spend) we would need to pay off that much debt? You know as good as I if the politicians see that we aren’t spending all of the money being collected that they will surely find somewhere to spend it.
Somewhere in the Middle
July 19th, 2011
1:51 pm
EJ Moosa – You captured the historical truth accurately: job growth is related to profit growth (i.e. demand creating revenue), job growth does not follow individual wealth. Coporate profits can indirectly make people wealthier, but it’s the health of the profit for a company, not individuals, that create jobs.
RGB Supporter
July 19th, 2011
1:55 pm
You go RGB! America needs more people just like you to speak up. I’d like to point out to the author of this article. Why is there such limited focus by our politicians on the “C” and “I” portions of the GDP equation you describe (GDP = C + I + G). I’ll tell you this we can either take our lumps now or our children and their children’s children will take them later. We have to get ourselves off of this credit driven economy! It’s really fundemental; Don’t live beyond your means. Do we want to be known as the generation that paid for what we bought or the generation that defaulted on our debt at the expense of future generations? My answer is affirmed every time I look into the eyes of my six year old. People and the government have to get themselves on the correct financial footing or we are just doomed to repeat these cycles of failure. I will say that next time we may not survive the “crash”…truthfully the jury is still out if we have survived this one.
MM
July 19th, 2011
1:58 pm
I have not yet heard anyone talk about an approach to putting people to work that involves prioritizing jobs for US citizens. For instance: 1) not renew the work visas for those in this country, taking good white-collar jobs from our citizens, and 2) implement some pain for those who export jobs overseas. I have seen way too many jobs in telecommunications, IT, and customer support either outsourced to India or filled with foreign workers here on a work visa. We should be taking care of our own FIRST and if there are still jobs unfilled, then offer them up to those wanting to come to the US and work. I personally know of several people displaced from their jobs by non-citizen workers and it’s just not right!
shaggy
July 19th, 2011
1:58 pm
Easy Fix 101:
Penalize the companies that take jobs offshore. Reward those that instead of taking jobs offshore, keep jobs in America.
Provide incentives for foreign companies to open shop here and hire American workers.
Create a business environment for stability and success. They WILL come.
mdee
July 19th, 2011
2:03 pm
The only thing that will create jobs (and resolve the many other ills in this world) is a return to God. These current problems are the product of a humanistic ideaology that turned hearts and souls away from God. We are now experincing the ‘flower’ of that mentality. We are wise, capable and intelligent yet, cannot correct, solve and/or improve these predicaments. The solutions are above our human vision, capabilites and understanding, in another realm.
Most have no desire to include God in the equation and most likely will be offended at the suggestion or anything of the sort, not my desire. The peace, abundance and security we once had and now desire can only be achieved by acknowleding we’re off course and return to the foundation, basics, simplicity and Source of life.
We’re all to blame, it is not Democrats/Republicians, rich/poor, black/white, etc… it’s a condition of our hearts being distant, distracted and tuned towards ourselves, tuned away from God. It is no easy but literally possible… will we choose Life? Where or what else can we turn to, we’ve got nothing to lose by considering and giving it a whirl.
Checkers
July 19th, 2011
2:09 pm
I bet Jimmy Carter thanks God each night that Obama came along to take away the crown of “Worst President in modern times.”
W took that title for eternity a few years back.
Inherited a balanced budget and blew that in about ten days then started an endless war in Iraq he had no idea how to get out of.
Genius. Pure Genius
HistoryLesson
July 19th, 2011
2:13 pm
Actually, the great depression and ensuing recession was not ended by WWII, as you suggest. The depression ended in the early 1930s, but a double-dip recession continued on until around 1938, when FDR put some different policies into place, after creating social security, Federal Reserve, etc – and spending lots of $ to do so. Because Congress switched hands and the country was tiring of policies that didn’t seem to be working to fix the economy, FDR implemented a number of pro-business, lower tax, lower regulation bills that got the economy moving. THE US entered the war 3-4 years later, which certainly created jobs, but it didn’t end the recession.
History facts are easy to find, if you look. And if you’re going to be columnist and purport to inform people, you should try using facts instead of what you heard on the playground (or wherever).
RGB
July 19th, 2011
2:14 pm
“Private sectors grow jobs not because wealthy people have a lot of money….. but most of all, demand is the key.”
Pardon my chopping your sentences, but it sounds like you are suggesting that poor people drive demand?
Separately, you say that “government infusion of capital into jobs would create that demand”. So only government infusion of capital drives demand but people creating wealth for themselves won’t?
.And you didn’t want me to rely on Cato for data?
Don’t healthy companies, job growth, and wealthy people occur together–even simultaneously?
HistoryLesson
July 19th, 2011
2:19 pm
Here’s another problem with your plan. While you’re correct that government can create jobs – I have many friends who work for federal, state, or local govs – the money brought into the government is much lower than if the job is created by the private sector. Why? Because the government pays a salary and then gets back only a percentage of that in taxes. If we all worked for the government, the government couldn’t exist. So the best solution is for people to work in the private sector and for the government to create as few jobs as possible.
Fletch
July 19th, 2011
2:22 pm
RGB – “So you recommend we raise corporate tax rates so we can have a Chad-like economy??”
Not at all, all we need to do is get the American worker to accept the wages of their foreign counterparts. i.e. the manufacturing employee must concede to $9.00 a day (which is on par with his counterpart in China) immediately. The I.T. professional currently demanding $60,000 a year plus benefits should be willing to take $15,000 and no bennies for the same job. After all, that’s what his counterpart in India is willing to work for. taxes are a moot point when the biggest expense any company has is PAYROLL. There’s nothing made overseas that can’t be made here. As soon as all you patriots step up and agree to these pay cuts, the sooner everyone can go back to work. I think it was Michelle Bachmann who said it best, and I quoute ” If we could just get rid of the minimum wage, and let companies pay what they want, we would have plenty of jobs”
Rc_K2
July 19th, 2011
2:23 pm
Listen I hate to be the bearer of bad news, but your food for thought is truly hogwash and the only way we the citizens of the United States are going to get out of this situation is to work our way out. It means no unnecessary spending. Government gets smaller, and if you want a job and want to make money, start by applying your complete skill set to something new. Whether one starts a neighborhood fruit stand, a garage seamstress, or newly minted baby sitter. These are new starter jobs, or you can be on the government dole an be burden to everyone. Last weekend I cleaned two condos for a friend and earned 230.00. It is a pathetic sum, but I needed the money.
RGB
July 19th, 2011
2:29 pm
Saxby has a plan that raises taxes by $1 trillion and is endorsed by Kent Conrad and Kay Bailey Hutchison.
Run for your lives.
Somewhere in the Middle
July 19th, 2011
2:29 pm
No, I did not say that only poor people drive demand. Demand drives demand. Demand can come from rich people, middle-class people, poor people, et al. But the idea that having more, or wealthier, wealthy people creates jobs is not supported by the data. The historical data actually shows that most inorganic demand comes with a larger middle class.
Also, government infusion of capital is not the only way to increase demand, it is a way to increase cash/jobs to drive demand. I can’t say that people creating wealth for themselves would not create demand, what I can say is that demand (capital) in a system creates areas for economies (companies) to grow.
You can rely on Cato as you choose, but I’d recommend if you’re going to provide U.S. corporate tax rates for comparison against other countries, you might be well-served to look at the taxes as % of GDP. That tends to be the standard. But, don’t trust me on it, I think the CBO would tell you the same thing. Cato is, if I’m not mistaken, run by Koch Industries, the 2nd largest privately held firm in the U.S., and they are noted to be conservative-leaning.
And yes, healthy companies and job growth occur together, even simultaneously, when there is a healthy economy. Healthy economies will create wealth. But taxes on individuals don’t correspond to healthy companies and job growth. Many of the ‘healthiest’ (defining as continued growth, cycle over cycle) companies and economies are in tightly regulated systems/models that don’t derive nearly what the U.S. economy can in individual wealth.
hobby
July 19th, 2011
2:31 pm
” most of the CEOs I’ve interviewed for this column probably disagree with it. But, in my view, too many people have been suffering for too long in this alleged “recovery,” which began more than two years ago.”
They are CEO’s and you are a writer. Who do you think knows more about how business works?
You live in the “everything should be fair” la la land of liberals
They live in reality
Henry Unger
July 19th, 2011
2:32 pm
HistoryLesson:
There is more than one view of World War II and recovery from the Great Depression. Here is how one source describes it:
“The common view among economic historians is that the Great Depression ended with the advent of World War II. Many economists believe that government spending on the war caused or at least accelerated recovery from the Great Depression. However, some consider that it did not play a very large role in the recovery, although it did help in reducing unemployment.”
yo mama
July 19th, 2011
2:39 pm
the oil industry, and the banksters have created a blockade for new energy. my friend who was in sacramento pitching hrydrogen in 2005 had his life threatened at his hotel by the oil folks. blame it on old USA not wanting the new USA.
Rc_K2
July 19th, 2011
2:47 pm
Henry, when one is so hungry that one thinks hard work is a blessing from God, is when the recession will be over. And that is actually how the Great Depression ended.
yuzeyurbrane
July 19th, 2011
3:09 pm
Amen! Common sense and straight talk at last.
usjobs
July 19th, 2011
3:29 pm
How about the government not just require a US headquarters but US employees on all contracts! I worked for a major tech company with a US headquarters and a major presence with the us govt but, like many of my US counterparts was layed off, not for lack of work but to move job overseas.
joe
July 19th, 2011
3:31 pm
The only way to put people back to work is vote out Obama Nov 2012…simple as that. Read what Vegas Casino Mogul Wynn had to say about Obama in Kyle’s blog from this morning…that pretty much sums it up…
fpl
July 19th, 2011
3:45 pm
It is widely believed today that FDR’s policies actually prolonged the depression. More government spending will have no effect on creating more jobs. Removing Obama in 2012 will do wonders for creating more jobs. Wealthy people with capital to invest are sitting on the sidelines. Check out Steve Wynn’s comments about what people with capital are doing. They are sitting on their thumbs fearful of what else Obama has up his sleeve.
dave
July 19th, 2011
3:56 pm
The greedy rich are the one’s that caused the problems and they are the only ones who can fix it.
We need salary and bonus limits and higher taxes on the rich
EJ Moosa
July 19th, 2011
4:06 pm
The solution is simple, as is the problem.
Are government programs and regulations making it harder or easier for companies to earn a profit?
Has it not been the clearly stated goal of this President’s administration to reduce profits of business(such as the oil industry with average profits of 6%)?
Do you believe all the rules and regulations that have been passed over the last two and one half years enhance or reduce the bottom line?
If government wants the private sector to increase hiring, then they should do what they can to improve those chances WITHOUT trying to pick the winners and losers.
And when a company has to compete with others that are being subsidized by the government, everyone loses.
None of you go to work to a job where after adjusting for day care, transportation and other costs, that you break even.
Don’t expect businesses to do what you do not do privately.
RGB
July 19th, 2011
4:12 pm
Somewhere (perhaps not In The Middle):
I appreciate your reply but the idea that wealthy people having money in excess of their needs not driving demand is counter-intuitive. No, I don’t have a double-blind, prospective, randomized trial to support that but it doesn’t make sense. People with excess wealth either buy things or invest it–and either way that has to have a positive effect on demand.
Further, wealthy people have done nothing to deserve tax code punishment. Making them poor won’t make me rich. That thinking is contrary to people who seethe with jealousy at their neighbors who have more material possessions. I’m not wired to want to punish people simply because they have excelled to a greater degree than me by working hard, putting their capital at risk, etc. Liberals live for the opportunity which explains why Mr. Obama wants increased taxes to promote “fairness” even though he admits higher tax rates often don’t produce more revenue.
Your views would, in my mind anyway, be characterized as Leftist-Statist as you seem to relish government intervention, transfer payments, and the like. I see no future in that approach and believe people will be retiring later, poorer, and sicker as a result of these failed government policies.
And for you folks who want to “keep U.S.” jobs by making “exporting jobs” illegal by fining companies, arresting people, etc–you are simply killing me and are choking the life out of our economic engine. Ever hear of “comparative advantage”?
I read it as I see it
July 19th, 2011
4:20 pm
It is NOT the government’s job to use taxpayer dollars to put people to work. If a business can’t succeed, then if it’s a good idea somone else will take over. No tax breaks, PERIOD!
I read it as I see it
July 19th, 2011
4:27 pm
who IS serious about a balanced budget? More waste of tax payer money!
“Birth Control May Become Free Under All Health Insurance Plans” drom AOL
Le Bourgeois
July 19th, 2011
4:42 pm
It is impossible to recreate the type of Civilian Conservation Corps, TVA, or other direct government jobs program in this day and age of mile thick bureaucracy and regulation. In FDR’s day, pretty much every dollar allocated from the treasury for public works projects and infrastructure ended up in the workers hands or in the material on the ground. Today, only a fraction of the allocated dollar actually makes it to the worker or project. Instead it is mired in red tape and duplicitous federal, state, and local agencies. We cannot have proper government stimulus like FDR had until we gut the federal bureaucracy. Trust me. I’m a local government “bureaucrat”.
HistoryLesson
July 19th, 2011
4:58 pm
It’s true that your economic theory of the 1938 recession has been written about, Mr. Unger. But instead of looking at a particular ‘view’ of history, you can look at facts. The recession ended in 1939/1940, before the US entered WWII. While economies are particularly hard to explain and our economy certainly rose rapidly after we entered the war in the early 1940s, your premise includes assumptions not in play, i.e. that the uptick in the economy would not have continued had we not become embroiled in the war. There’s nothing to back up that up. I’d be right with you, if you had said that WWII enhanced our economy in the 1940s, but that wouldn’t go to the points you want to make in your article, would it? Because WWII did not get us ‘out of the Great Depression.’ And since the great depression ended in the early 1930s, this statement is an especially agregious error.
And while I’m at it, you might want to refresh your memory on the Hoover/FDR era, too. While Hoover’s actions weren’t responsible for the Great Depression – he came into office only 8 months before – he was responsible for worsening it, initially by raising tariffs on foreign products, which other countries then raised on us, in retaliation, slowing down US production drastically. Later in his presidency, Congress raised income taxes, to 65% for highest earners (after reducing them earlier, from 70% to 25%), along with hefty estate, corp, and other taxes. FDR’s campaign attacked Hoover for ’spending and taxing too much.’ They even called him a socialist! Why? Hoover actually started the public works program (FDR continued it, but it had minimal impact on the depression), along with trying to implement many other social programs. Which is why most historians write that much of FDR’s New Deal came from programs Hoover started – or tried to start.
This isn’t an argument on the pros/cons of the New Deal or tax cuts/increases, though I certainly have my opinions. But if you’re going to write columns giving your opinion on these issues, you should bone up on those important lessons you learned in economics class (and history class?) before you pick up that laptop and start writing.
Somewhere in the Middle
July 19th, 2011
5:01 pm
RGB- I did not state that government spending was the wise option, or optimal option, what I said was that it was an option. And, if that were the chosen option, it would only be successful long-term if it were supported by a move to privatization. Nor did I say that rich people should be made poor. I’d be honored if you could pinpoint in any of my comments where I made either of these types of statements. If you want to further support your arguments by stating what you believe I have said, as opposed to what they actually were, have at it. It’s a successful debate mechanism if your audience doesn’t pay attention. What I said was that having more, or wealthier, wealthy people does not translate to a healthy economy. You are currently living in the best example of that ever. There are currently more, and wealthier, wealthy people in the U.S. than at any time, in any country, in documented history. Has that translated into a healthy economy? Income tax rates are lower than they have ever been. Has that translated into a healthy economy? The corporate tax rate is third lowest (relative to GDP) of any industrialized country. Has that translated into a healthy economy? My point earlier was that economies grow when there is a growth in demand. A growth in demand can come from a new technology (the internet), inorganic growth (financial deregulation), or capital infusion (spending, be it from the government or the boy scouts).
You can play the ‘don’t hate me because I’m successful’ game, it’s a great sociological ploy to create a common enemy (the poor are poor because they just don’t work as hard as everyone who is better off than them), but the economical facts are the facts. And the economical facts are that we’ve never had a greater disparity between the upper wealthy (bravo for them, I think there should be more of them!) and everyone else. That level of wealth disparity is not, nor has ever been, healthy for an economy. Having a portion of the population being wealthy drives demand only if that segment of the population can drive demand enough to maintain a healthy economy for everyone in it. If you’re still struggling with that being counter-intuitive, let me know and I’ll try and explain it without a random-sample, double-blind test. Which, by the way, was a pretty funny comment. I’ll presume that fell into the ‘let me ostracize this person by calling them out as an elitist’ remark. Pretty good stuff.
Somewhere in the Middle
July 19th, 2011
5:06 pm
RGB- By the way, I’m raising my hand. I’ve heard of ‘comparative advantage’. Do I get a t-shirt? A car wash? My name spray painted on the 17th Street overpass?
Uncle Billy
July 19th, 2011
5:26 pm
RGB-Why not deal with the arguments I make rather than the ones you wish I had made?
I assume you do not dispute that the interstate highways have created some value as have the technology for launching satellites, the internet and GPS and other government projects. I was responding to John Stossel who seems to believe the government never produces wealth. But he is with Fox News, enough said.
Explaining how WWII produced a large debt and a booming economy does not refute the claim that a booming economy is not inconsistent with rapidly increasing federal debt. It happened. Spending on more productive assets could do the same thing.
The CBO has studied the stimulus and concluding that it created or saved many jobs, perhaps as many as 3.3 million. See
http://www.cbo.gov/ftpdocs/117xx/doc11706/08-24-ARRA.pdf.
I never said all government spending is good. I would, for instance, eliminate entirely ethanol subsidies which are harmful to everyone not receiving them. You need to get over the all or nothing approach. For instance, I did not say that there should be no government. It is the logic of the position of Stossel, Ron Paul and other libertarians.
Breaking windows was not a proposal raised by me, so why would you assume that I would hold that position? Is it because you wish I held that position? I wonder if Bastiat story was based on an actual proposal or if it was something he thought up to try to discredit his opponents because he could not deal with their actual arguments. I find it hard to get people to deal with what I actually said, do you? For instance, I find people saying that I advocate “wildly excessive government spending” when I have never advocated such a thing. It is easy to win an argument if you state your opponents case for him.
We will never get spending to the level under Eisenhower because the population is aging and spending on Social Security, Medicare etc. will be hard to hold down. However, if we got health care spending to the level of the average of other highly industrialized countries, we could have a surplus. That, however, would be a gargantuan task.
I voted for Herman Talmadge a few times but he did not produce the quote you cite. That was Russell Long, Senator from Louisiana.
Read more, write less.
Tay Tay
July 19th, 2011
5:55 pm
shaggy
July 19th, 2011
1:58 pm
Easy Fix 101:
Penalize the companies that take jobs offshore.
What an idiotic comment. Here’s a better fix: if you want to work for a company that moved its jobs to India, move your sorry butt to India. The problem with that is in India they require you to actually work, you don’t get to join a union and sit at your desk playing on the Internet half the day.
Somewhere in the Middle
July 19th, 2011
6:01 pm
RGB – Just read about the Saxby Chambliss proposition. Grover Norquist is not going to be happy.
DawgDad
July 19th, 2011
6:52 pm
Articles like this make me very uneasy about renewing my AJC subscription.
Federal spending either transfers wealth or drives us further into debt. Yes, there is a small multiplier effect from federal works programs, but nothing near the multiplier and economic growth arising from private sector jobs. Bigger government, more inefficiency and corruption, more “locked in” spending programs that will never go away, and ultimately higher taxes. Bigger government is empowering the wrong people in this country, and if we do not reverse the trend we are headed down the tubes as a nation.
FDR did not get the US out of the depression.
m9985
July 19th, 2011
8:27 pm
It is refreshing to see some comments on this issue in the AJC that actually make sense. Of course, there are times when government is inefficient, and, of course, there are potentials for abuse and waste. On the other hand, the federal government can have the ability to hire people in an economic downturn and improve the condition of us all. Business often is unwilling to take that risk.
Tax breaks are one way to stimulate the economy, but right now business is holding on to its capital and is not likely to spend it until it sees the economy improve. In the long run business depends on having customers who spend money. Our economy is changing because of increased automation and we need long term investments in projects that will employ more of our population.
ellacarey
July 20th, 2011
5:27 am
Unemployment numbers are comprised of those that are in the job market for the past 30 days. It does not include those that have not been in the job market in the last 30 days: people who have given up looking; those that have gone off unemployment because it has run out. One solution to unemployment is “High Speed University” check it out
rambling wrecker
July 20th, 2011
8:21 pm
@ RGB…That’s really a pseudonym for Herbert Hoover isn’t it?
Maybe you should take a class in remedial Economics….particularly the chapter about supply and demand.
Phil
July 20th, 2011
9:24 pm
You are a complete moron, yes you are. The federal government has no role in those programs. Jobs will not return until companies (yes, the villified greedy corporations) have the confidence to hire again. What’s good for them, and I’m not a part of one, is good for us. This hiring will not happen under this foolish administration, at least until we’re sure they’re on their way out, back to kindergarten.
misa
July 21st, 2011
4:48 pm
If GA would remove this “at will” clause more Georgians would be employed. Employers can hire and fire at their discretion
What’s your prescription for weakening economy? | The Biz Beat
July 22nd, 2011
5:52 am
[...] this week, I wrote about my idea for stimulating more job [...]
Knowledge, Not Ideology
July 22nd, 2011
12:57 pm
You neo-cons who think big business is the answer to everything are so silly. Did you happen to notice what happened almost three years ago on Wall Street, the epicenter of big business? Oh, I suppose that was because there was too much government regulation and oversight.
Folks, government, any government, has an important role in any nation, and that’s to lead. It’s not to sit back and watch. When a nation is attacked, a government doesn’t have the luxury of saying “Gosh, we sure hope someone takes up arms against our enemy.”
When a nation needs roads, bridges and water and sewer systems, a government can’t say “If you citizens get a chance, would you please build some infrastructure?”
And finally, when a nation is in economic turmoil, it is absolutely the worst thing the government can do to sit back and say “Any minute now, the private sector will get us out of this, so we better not do anything.”
The private sector has one mission and one mission only: to be profitable. Well, there’s more to sustaining an entire economy than just having a handful of companies that are individually profitable. An economy has many more components that must be monitored and corrected when necessary.
Sure, that sounds socialist, so feel free to call it that if you want. But any country in the history of the world that has had sustained economic health has done so with crucial government involvement, including this country.
Brian
July 24th, 2011
6:33 am
Create a “micro-loan” structure where companies invest in people to start businesses. Micro-lending has been hugely successful in Africa. Why not implement a similar program in Georgia to assist prospective entrepreneurs to spur economic development and help individuals achieve the American dream of owning their own businesses. Also, create new taxpayers. New taxpayers are produced by lowering taxes on small businesses so these business owners will have more money to create jobs, hire people and expand the economy.