Federal Spending killing the economy

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http://www.forbes.com/sites/dougban...killing-the-economy-with-government-stimulus/

“The White House forecasts that government spending in 2012 will exceed 2011 levels by 5 percent and will be 27 percent higher than it was in 2008.”

27% higher... what are we getting for it?

A 2009 IMF study of economic research suggested a multiplier in the range of 0.3 to 1.8, with some variation based on country size. In a paper for the National Bureau of Economic Research, Valerie Ramey of theUniversity of California (San Diego) reviewed the economic literature, which suggested that the multiplier probably was between .8 and 1.5, and almost certainly was between .5 and 2.0.

However, she personally reached far more negative findings: “For the most part, it appears that a rise in government spending does not stimulate private spending; most estimates suggest that it significantly lowers private spending. These results imply that the government spending multiplier is below unity. Adjusting the implied multiplier for increases in tax rates has only a small effect. The results imply a multiplier on total GDP of around 0.5.”

Obviously she is to the low end of the range, but given the failure of the massive amounts of government spending the last few years to stimulate the economy, it appears she is correct.

Finally, any attempt at “stimulus” leaves a long-term cost after any short-term benefits have long dissipated. Observed Barro: “fiscal deficits have only a short-run expansionary impact on growth and then become negative.” Thus, constantly increasing deficits result in “persistently low economic growth and an exploding ratio of public debt to GDP.”

This is the point that the 'spend more' morons don't ever seem to grasp. They only look to the short term and ignore the long term effects.

Side note: Our debt service bill is about $500B this year.

 

[Cancel 2016.2]

That is, diverting productive capital to pay off government debt will permanently reduce the GDP. Workers will earn less while paying more to finance a larger debt. Warned CBO: “Budget deficits that grow faster than the economy ultimately become unsustainable. As the government attempts to finance its interest payments by issuing more debt, the rise in deficits accelerates. That, in turn, leads to a vicious circle in which the government issues ever-larger amounts of debt in order to pay ever-higher interest charges. In the end, the costs of serving the debt outstrip the economic resources available for financing those expenditures.”

Read, comprehend, quit being a parrot Dung.

 

[Dixie - In Memoriam]

Finally, any attempt at “stimulus” leaves a long-term cost after any short-term benefits have long dissipated. Observed Barro: “fiscal deficits have only a short-run expansionary impact on growth and then become negative.” Thus, constantly increasing deficits result in “persistently low economic growth and an exploding ratio of public debt to GDP.”

This is the point that the 'spend more' morons don't ever seem to grasp. They only look to the short term and ignore the long term effects.

Side note: Our debt service bill is about $500B this year.

You still aren't getting it, the morons who you are arguing with, are useful idiots. They are there to keep you busy arguing things that, really, only a moron would attempt. The Marxist-Socialists don't care that the economy isn't improving, they don't care if the next stimulus doesn't work, they don't care if we ever recover... in fact, their HOPE is, that our capitalist system will eventually collapse. This would mean the dollar becomes worthless. When that happens, they can repay the $15 trillion debt with worthless dollars, and then rebuild a new America in the model of the former Soviet Union. They merely need to keep you distracted in silly debate, long enough to reach a point of no return, which we are headed toward with breakneck speed. They will lie right to your face, and act as if they are genuinely interested in bringing back the economy and prosperity, but we know that's a lie, they are doing everything to ensure that can't and doesn't happen. You think that you've just not shown them enough information, they don't get it, that these people are just clueless about this stuff, and for some of the idiot posters here, you are probably correct, but the "plan" under way by the people who now control the Democrat party, is to destroy Capitalism and usher in Socialism, and you are kidding yourself if you believe otherwise at this point.

 

[Bonestorm]

Read, comprehend, quit being a parrot Dung.

I don't dispute that following the CBO's Alternative Fiscal Scenario for the next 75 years would destroy the economy. Congratulations on proving nothing.

 

[Cancel 2016.2]

I don't dispute that following the CBO's Alternative Fiscal Scenario for the next 75 years would destroy the economy. Congratulations on proving nothing.

Hilarious... just keep your head in the sand Dungster.

 

[Bonestorm]

Hilarious... just keep your head in the sand Dungster.

The CBO report that quote is taken from analyzes what happens if nothing changes on revenue or spending side from 2008 until 2083. No one disputes that not changing tax and spending levels from now until 2083 will have a devastating impact on the economy.

The issues are (1) should we start the spending reforms during a soft economic recovery or wait until the economy recovers more fully and (2) the precise spending to cut and taxes to increase.

 

[Cancel 2016.2]

The CBO report that quote is taken from analyzes what happens if nothing changes on revenue or spending side from 2008 until 2083. No one disputes that not changing tax and spending levels from now until 2083 will have a devastating impact on the economy.

The issues are (1) should we start the spending reforms during a soft economic recovery or wait until the economy recovers more fully and (2) the precise spending to cut and taxes to increase.

yes, and what happened to revenues and spending since that report dung?

Spending in 2012 will be about 25% higher. Revenues are down. You think that has an adverse or positive effect on that timeline?

There is NO reason we should be spending 25% more in 2012 than 2008.

I know you will likely keep your head in the sand, but if not, try reading the entire article.

 

[Howey]

Simple. Increase revenue.

 

[Cancel 2016.2]

Simple. Increase revenue.

LOL... so you will take money out of the hands of consumers (which account for 2/3 of our economy) or out of the hands of corporations (which has a negative impact on hiring) and place it in the hands of a bunch of idiots in the two parties who are experts at nothing other than wasting money. Great plan.

 

[Howey]

LOL... so you will take money out of the hands of consumers (which account for 2/3 of our economy) or out of the hands of corporations (which has a negative impact on hiring) and place it in the hands of a bunch of idiots in the two parties who are experts at nothing other than wasting money. Great plan.

We've tried it your way for 30 years. Didn't work. Increasing taxes, thus revenue, on the upper incomes will reduce the deficit. That's what this is all about, right?

Additionally, and I'm sure this is a well-worn talking point, but that "money" has been in the hands of corporations, hasn't it? Haven't they been hoarding the money for years? Have the taxes been raised in the past four years? No.

SO WHERE'S THE JOBS?

 

[Billy the Great Khan]

We've tried it your way for 30 years. Didn't work.

We cut spending for 30 years? When?

 

[NOVA]

We've tried it your way for 30 years. Didn't work. Increasing taxes, thus revenue, on the upper incomes will reduce the deficit. That's what this is all about, right?

Additionally, and I'm sure this is a well-worn talking point, but that "money" has been in the hands of corporations, hasn't it? Haven't they been hoarding the money for years? Have the taxes been raised in the past four years? No.

SO WHERE'S THE JOBS?

Will pinheads ever learn and accept the truth....???

http://www.mtgriffith.com/web_documents/taxcutmyths.htm

FACT: Historically tax cuts have always paid for themselves. Federal revenue increased after the JFK tax cuts, after the Reagan tax cuts, after the Clinton tax cuts, and after the Bush tax cuts. The problem has not been taxes. The problem has been runaway spending.


FACT: Tax cuts, not tax hikes, caused the boom years of the 1990s. The economy grew modestly after Clinton raised taxes in 1993, but the economy grew even more after Clinton signed the tax cuts that were passed by the Republican-controlled Congress under Newt Gingrich’s leadership in 1997.


FACT: Even JFK understood that lower tax rates produce economic growth and even higher tax revenue.

FACT: JFK rejected the idea that we can borrow and spend our way out of tough economic times. Instead, he argued for tax cuts, including corporate tax cuts

 

[Howey]

Will pinheads ever learn and accept the truth....???

http://www.mtgriffith.com/web_documents/taxcutmyths.htm

FACT: Historically tax cuts have always paid for themselves. Federal revenue increased after the JFK tax cuts, after the Reagan tax cuts, after the Clinton tax cuts, and after the Bush tax cuts. The problem has not been taxes. The problem has been runaway spending.


FACT: Tax cuts, not tax hikes, caused the boom years of the 1990s. The economy grew modestly after Clinton raised taxes in 1993, but the economy grew even more after Clinton signed the tax cuts that were passed by the Republican-controlled Congress under Newt Gingrich’s leadership in 1997.


FACT: Even JFK understood that lower tax rates produce economic growth and even higher tax revenue.

FACT: JFK rejected the idea that we can borrow and spend our way out of tough economic times. Instead, he argued for tax cuts, including corporate tax cuts

So I'm supposed to believe a Mormon apologist and Kennedy death conspiracy theorist who's claim to fame is completion of a two year degree from the Community College of the Air Force (in theology) and graduated from Tech school?

Nah...

 

[Cancel 2016.2]

We've tried it your way for 30 years. Didn't work. Increasing taxes, thus revenue, on the upper incomes will reduce the deficit. That's what this is all about, right?

1) You have not tried it my way for 30 years. You have had 50 years of continuous deficit spending. That is the liberal way. A way that both parties enjoy.
2) Increasing taxes on upper income people does not mean deficit reduction. Even as revenue has increased in the past 50 years, the idiots in DC have always managed to outspend their revenue.

Additionally, and I'm sure this is a well-worn talking point, but that "money" has been in the hands of corporations, hasn't it? Haven't they been hoarding the money for years? Have the taxes been raised in the past four years? No.
SO WHERE'S THE JOBS?

1) yes they have cash
2) No tax rates have not gone up
3) Neither has the tax question been answered. The Obama admin has had almost 4 years to resolve the tax code issues that faced us. We knew the Bush tax cuts expired at the end of 2010. He did nothing.
4) As long as the government continues to outspend revenue by $1Trillion + a year, corporations are going to sit on cash... they know who is likely going to get stuck with the bill if the Dems have anything to say about it.
5) Dems have never met any amount of revenue they couldn't outspend in the past 50 years... neither have Reps. Revenue is not the problem. Spending is the problem. Do you honestly think there isn't wasteful spending? I am fairly sure I have seen you, rightfully so, say that defense was a good place to start.

 

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Side note Howey... if you borrow $4 Trillion over 4 years (which Obama has done), that is an additional $80B (being generous here using 2% rate of interest) per year that simply has to go to China or Japan or the Federal Reserve bank owners. Our current interest is about 500B per year. That is the problem with the idiots that think we should keep borrowing.

 

[NOVA]

So I'm supposed to believe a Mormon apologist and Kennedy death conspiracy theorist who's claim to fame is completion of a two year degree from the Community College of the Air Force (in theology) and graduated from Tech school?

Nah...

Then try the sources....

CBO Forecast Shows Runaway Spending, Not Tax Cuts, Causing Deficits
http://www.taxfoundation.org/news/show/97.html

CBO Forecast Shows Rising Spending Continues to Drive Federal Deficits
http://www.taxfoundation.org/news/show/1323.html

Government Spending Makes Recessions Worse
http://www.independent.org/newsroom/article.asp?id=2395

Deficit Deception
http://www.reason.com/news/show/30240.html

Cmparing the Kennedy, Reagan, and Bush Tax Cuts
http://www.taxfoundation.org/news/show/323.html

Statistical Charts on Federal Revenue
http://www.heritage.org/research/features/BudgetChartBook/Federal-Revenue.html

Who Pays Income Taxes? See Who Pays What
http://www.ntu.org/main/page.php?PageID=6

John F. Kennedy Address to the Economic Club of New York
http://www.americanrhetoric.com/speeches/jfkeconomicclubaddress.html

Income Tax Receipts Stay Constant Even as Tax Rates Declined
http://www.heritage.org/research/fe...boc-T1-Income-Tax-Receipts-Stay-Constant.html

CBO: Obama Budget to Add $4.8 Trillion to Deficit Through 2019
http://spectator.org/blog/2009/03/20/cbo-obama-budget-to-add-48-tri

Kennedy v. Kennedy
http://www.jewishworldreview.com/jeff/jacoby031601.asp

Under Bush, Federal Spending Increases at Fastest Rate in 30 Years
http://www.independent.org/newsroom/news_detail.asp?newsID=31

Should the Bush Tax Cuts Be Extended Beyond 2010?
http://www.ntu.org/main/press_commentaries.php?PressID=923&org_name=NTU

Federal Spending Is Growing Faster Than Federal Revenue
http://www.heritage.org/research/fe...-2008-boc-C1-Federal-Spending-Is-Growing.html

Supply-Side Tax Cuts and the Truth About the Reagan Economic Record
http://www.cato.org/pub_display.php?pub_id=1120

Government Spending Grew Faster Than Revenues for Most Administrations
http://www.heritage.org/research/fe...8-boc-C2-Government-Spending-Grew-Faster.html

It's the Spending, Stupid!
http://www.cagw.org/site/News2?page=NewsArticle&id=6264

Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom
http://www.heritage.org/Research/Taxes/wm1835.cfm

The Reagan Tax Cuts: Lessons for Tax Reform
http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm

Spending Cuts Instead of Tax Increases
http://www.cagw.org/site/PageServer?pagename=policy_Spending_Cuts_Instead_of_Tax_Increases

The Federal Government Debt: Its Size and Economic Significance
http://old.concordcoalition.org/doc/crs-debt-basics.pdf

The President's Budget: A Bold Approach with Many Risks
http://www.concordcoalition.org/issue-briefs/2009/0313/president%E2%80%99s-budget-bold-approach-many-risks

 

[Bonestorm]

yes, and what happened to revenues and spending since that report dung?

What does that have to do with anything. You posted a snippet of a report that says something entirely uncontroversial about what happens over the long-term if nothing changes with revenues and outlays and want to pretend that it is relevant to short-term spending issues. It isn't.

Spending in 2012 will be about 25% higher. Revenues are down. You think that has an adverse or positive effect on that timeline?

Who cares? The timeline in that report extended to 2083.

There is NO reason we should be spending 25% more in 2012 than 2008.

Actually, there are good reasons for it what with 8+% unemployment and all.

I know you will likely keep your head in the sand, but if not, try reading the entire article.

I've heard it all before, SF. There's nothing new in there. You like it because it echos what you believe and that's fine, but I'm not interested in reading conservaporn.