Until Midterm Elections...

Scott versus Scott

Welcome to our blog. Here we will debate the days most serious topics and allow users the chance to discuss the topics as well. The range of topics will vary, but one thing will remain certain, the debate will rage on. Scott Lesinski is a proud conservative and Scott Jones is a proud liberal. However, the roles will switch on some topics. Stay tuned.

Scott Lesinski is currently an actuarial associate for a large human resources and insurance consulting firm in Saint Louis. He is also an avid student of US history and enjoys following current events, with an eye to their contextual relationship to the past. He is also, in fact, a former student of Mr. Scott Jones. Scott is working toward his FSA credentials, which is akin to earning a PHD in Actuarial Science.

Scott Jones is currently a high school social studies teacher at a high school in suburban St. Louis, MO. He teaches World History, AP American Government and Senior American Foreign Policy. He has a BS. Ed. (Secondary Social Studies) from the University of Missouri - Columbia and a M.A. (History) from Southeast Missouri State University. He is currently working on a dissertation in character education to earn a Ph.D. in Educational Psychology.

Sunday, June 7, 2009

Obama is succeeding! Unfortunately, this means America is not.

Well, I’ve always stated that I am a results-oriented person, especially regarding politics and economics. I want to put policies in place that I know, from experience, will work.

But alas, do we all agree on the functional definition of “work” or “succeed” when it comes to economic policies? I value low unemployment, GDP growth, net income growth, and steady, low inflation. I value a strong dollar. Barack Obama seems to value “fairness” over these sound economic precepts. I railed about how his policies would fail prior to the election and ever since, but let me put my money where my mouth is and dive into some actual data.

Per the Department of Labor and the Office of Management and Budget, here are some timely statistics, that will help us gage whether Obama’s socialist policies are working.

Unemployment Rate
Sep-08 6.20%
Oct-08 6.60%
Nov-08 6.80%
Dec-08 7.20%
Jan-09 7.60%
Feb-09 8.10%
Mar-09 8.50%
Apr-09 8.90%
May-09 9.40%

Jobs Gain/Loss
Sep-08 (321,000)
Oct-08 (380,000)
Nov-08 (597,000)
Dec-08 (681,000)
Jan-09 (741,000)
Feb-09 (681,000)
Mar-09 (699,000)
Apr-09 (539,000)
May-09 (345,000)

Debt held by the public in 2008 dollars by year
Year (trillions) %increase Debt/GDP
2001 3.97 N/A 33%
2002 4.16 4.79% 34.10%
2003 4.51 8.41% 36.20%
2004 4.82 6.87% 37.3
2005 4.99 3.53% 37.50%
2006 5.08 1.80% 37.10%
2007 5.15 1.38% 36.90%
2008 5.8 12.62% 40.80%
2009 8.41 45.00% 59.90%
2010 9.64 14.63% 67.10%
2011 10.47 8.61% 70.10%
2012 10.86 3.72% 69.60%
2013 11.16 2.76% 68.70%
2014 11.51 3.14% 68.50%

The first two sets of data demonstrate that I was right; Obama’s stimulus/porkulus socialist redistributive policies are not working. We have to hold Obama accountable; he said in a press conference in January or February that the way we were to gauge whether his policies were working was to look at the number of jobs. He promised to “create or save” 2.5-5 million jobs (the number fluctuated depending on the day). He invented this totally unmeasurable factor of “jobs saved” as a way to conceal the true failure of his policies. There is no way you can claim a job was saved as a result of Obama’s policies (unless you want to look at government jobs…he has added quite a few of those).

To be fair, we were headed into a recession before Obama took office; the data clearly support that statement. I firmly believe unwise liberal policies were the initial impetus for our economic woes, from the Carter/Clinton/Barney Frank/Chris Dodd housing bubble burst to the continued lack of consumer confidence I believe the first round of stimulus caused. I spoke out against the Bush administration, so please don’t try to just dump on Bush. I am not a sycophant of Bush and never was, plus, he is in Crawford and can’t do anything any longer. Obama has a responsibility to correct the wrong action of Bush near the end of his term, not exacerbate the problem by just accelerating the spending and government control.

Lets dive into the data. Since Obama took office in January, we have lost 2,264,000 jobs (I’ll go ahead and attribute January’s losses to Bush, since Obama hadn’t done anything yet). Based on Obama’s metric of success, he is failing miserably.

The May unemployment rate was 9.4% - a 26 year record high. This does not convince me that we are going in the right direction under Obama.

But Scott, we haven’t given Obama enough time yet! We must have faith!

Well consider this, of the $461 billion called for to be spent by the end of 2010, a mere $37 billion has been spent. That is 8%. Much of the stimulus bill is so back loaded into 2010, that many are predicting the economy will have recovered by the time it gets spent! Now why would this be? If “only government has the power to fix the economy”, then why isn’t Obama using government to fix the economy? He has the spending passed, why not ask that it be accelerated if it is truly the only thing that can cure our woes?

The third data set is the real scary one, in my opinion. Remember, these numbers are coming from the Whitehouse website, the OMB. These are Obama’s numbers. His office is projecting that publicly held debt of the government will increase by 45% in one year under his leadership, and will almost double in five years. This is unsustainable debt, my friends. No bleeding heart ideology can counter that fact. We cannot afford Barack Obama and his own projections prove my point.

That last column of data is debt as a percentage of the GDP. Notice that it jumps 20% in Obama’s first year in office. Folks, when our debt is 70% of our total production, we are totally screwed. It is not a matter of my conservative principles or your liberal ones; arithmetic cannot be biased. We won’t have the money to pay for our interest on our debt, much less try to pay it off.

And here is something else, with all these people unemployed, they are not earning incomes and paying income taxes, nor do they have as much cash to spend into the economy. Exactly as I have predicted and claimed, Obama’s policies are causing “trickle up” poverty.

All this bad economic news, yet Obama is full steam ahead. His next policy initiative in National Healthcare, which we’ve debated, but which would just add another crushing weight to our already bloated budget. And another point that must be brought up about healthcare:

Folks, if we get public healthcare, we will lose our freedom. Government will assume total control over our personal lives. They will claim that they are paying for our healthcare, therefore, we must not eat this, drink that, do this activity, drive this car, smoke cigarettes (not that I do, but its freedom I’m about)…the levels of dictatorial control are literally endless. All of this will be done “on our behalf” or we’ll be asked (told) to sacrifice for future generations. Not to mention all the rationing of care that will necessarily follow government involvement.

Obama’s budget masters have projected that his health proposals will actually decrease the deficit in future years, but that is a total laugh.

Something else, Obama wants all these green jobs. He says he is going to create thousands of new Green Jobs with all of his “investments” in green energy. He cites Spain, Germany and Japan as countries we ought to emulate when it comes to adding green jobs.

A new Spanish university study suggests we probably shouldn’t be going this way.

“Gabriel Calzada Alvarez, a professor, has released a study with startling claims about what's happened in Spain and what he predicts will play out in America.

Calzada says for every green job that's created with government funding, 2.2 regular jobs are lost and that only one in 10 green jobs wind up being permanent.

With billions slated to go toward similar programs in the U.S. the study is sparking new concerns.”

This study is out of La Universidad Rey Juan Carlos in Madrid. With our already suffering jobs figures, lets not go this green route, how about that?

I mentioned at the beginning of my post what my definition of “work” or “succeed” was when it came to the economy. As stated, Obama’s policies are not working. However, from Obama’s perspective, I believe they are working quite well.

He has nationalized several banks and insurance companies. He threw out the CEO of GM and has nationalized both GM and Chrysler. He is steadily increasing the level of dependency of all of us on government. He has capped executive pay. He has a state-run by proxy media that is trying desperately to spin these horrible economic numbers as good news. CEOs everywhere are cowering in fear of him. He has appointed 21 czars in the Whitehouse as a way to circumvent the constitutionally required senatorial review process of cabinet members.

He is restoring the nation’s wealth to its so-called rightful owners.

Rush said it best when he said he hoped Obama would fail, and that by virtue of Obama failing, America would succeed. Unfortunately, Obama is succeeding.

We can stop this decline. We get to speak up in 2010. We must elected people to Congress who will fight against the takeover of the private sector and the limitless government spending. I am telling you friends, if we implemented my proposed policies we could see this economy come roaring back next year. Because my proposals would help individuals succeed, not the government.

22 comments:

  1. I would just like to add that we could fire the Dep of Energy and rehire them to do whatever Obama wishes and it would probably be more effecitve than what they're doing now

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  2. The economy has been declining for years... to think that any new policy could stop it, much less turn it around in 6 months is rediculous... And to attribute the unemployment numbers to Obama is just wrong... we are still seeing the fall out of years of mis-management, and mis-direction by large corporations... all overseen by the Bush administration...

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  3. I know a new policy that could stop it and turn it around in 6 months. Do the exact opposite of what Obama has been doing.

    Businesses aren't hiring because they are very uncertain, and actually quite negative, on the future of the economy. They know that this kind of spending is destructive to any economy and it has never worked, ever in history. You can't spend your way out of debt or borrow your way to prosperity. What we need is growth.

    What business do YOU think is feeling all that secure right now? Think of it, the CEO of GM was fired by Obama on a whim. Wagoner worked there for over 30 years and knew what he was doing. He wanted to ramp up production of trucks and SUVs, you know, cars that have historically been profit leaders for GM. Obama didn't like that, so he canned him.

    Obama just forced Chrysler to go into bankruptcy and sell itself to Italian carmaker Fiat. He gave a majority stake of ownership to the UAW and left the secured bondholders with pennies on the dollar of their investments.

    Obama is in the process of nationalizing the largest banks in America. He told the leaders of health in this country that they better decrease the growth of medical expenses, or else.

    Obama seeks a cap and trade (cap and tax) scheme for CO2 emissions that will just devastate the economy, especially the poor and middle class, which gives businesses even further pause at trying to expand when they can see the writing on the wall that consumers are going to be even more skittish about spending their even fewer discretionary dollars.

    Obama wants to create as large a welfare state in this country as possible, because he views that as key to maintaining power. Once he has gotten a large enough group of people receiving government wealth redistribution handouts, he figures he can establish a 40 or 50 years grip on political power in this country for Democrats - the same way FDR did it.



    How would I fix the economy? Simple:

    Cut the corporate tax rate to 17.5% (from 35%)
    Eliminate capital gains tax for a year, reestablish it at 10% after that.
    Go to a flat tax system for income taxes. All money we earn gets taxed at 10%. No "progressive" taxation (read: wealth redistribution). The rich in this country are the ones who employ the rest of us.

    Obviously, we have to make cuts in the budget to make this work. Unemployment benefits get capped at 12 months time (currently 90 months). We have to eliminate people from the rolls who are milking the system.

    Raise the retirement age for social security to 72. WHen it was established, the life expectancy was 63, and the retirement age was 65. Now, we can safely expect to live into our 80s given we've made it into our teens, which is when people can really start paying into SS in the first place. This needs to be adjusted.

    We could just totally dump the Departement of Energy, they employ about 62,000 bureaucrats and they don't really do a whole lot. Lets get those people actually producing something instead of paying them to reduce our dependency on foreign oil (their original charge) because they seem incredibly inept at that task.

    Lets eliminate the Department of Education. Another office that is failing terribly; perhaps letting states control education would be a better way of handling this.

    Above all else, we must stop the bailouts. People need to be allowed to fail and that includes states. The more the feds get their tentacles into, the more control they have over our lives.

    The dirty little secret is that it is precisely that which Obama wants.

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  4. Not a lot of time to post right now, but consider this...

    Look at the international per capita GDP rankings published by the International Monetary Fund. See where the US ranks (15th) and where the countries Scott L. claims Obama is taking us with these "socialist policies" (Norway 2nd, Switzerland 4th, Ireland 6th, Sweden 9th, Netherlands 10th, Finland 11th, Austria 12th, Belgium 14th).

    What Scott L doesn't want you to know is that a nationalized healthcare plan (all the countries listed above, except for the US) and a fairly regulated economy with the government subsidizing where necessary might actually lead to a higher per capita GDP.

    But SJ, these countries you listed are too small. Well, the largest countries of Europe with these types of social help programs rank France 16th, Germany 19th and the United Kingdom 20th). The difference between the US and France is a mere $600 in per capita GDP.

    Scott L., you claim you want policies that you claim will work based on your experience, well history and current events actually tell a different story.

    Sorry

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  5. Wow... so many things to say here, just not wanting to go into it all tonight. I do, however, need to address the social security issue brought up by Scott L.

    We may be living longer as a country, but not everyone has a cushy desk job. I have worked with a lot of older men and women in warehouse and factory settings who are barely fit enough to make retirement age now.

    These are people who have spent their entire lives working harder and in worse conditions than most of us can imagine. I know, I know... "they chose their line of work", but not everyone has the skills, or the opportunity, to get an easier, well paying job.

    So, your idea is to "adjust" social security so these people have to work even longer? Some of them would quite literally, die on the job before they could collect...

    The numbers may look good on paper, but you should get to know the people those numbers represent before making a judgement.

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  6. Scott L.
    Your economic assumptions are severely flawed. The US went into its contraction because average people borrowed far too much money. That happened as a result of a typical bubble that was made worse by betting on mortgage failures through insurance companies (credit default swaps). Roosevelt had made those bets illegal 70 years ago, but George Bush reversed that policy. We had to save AIG or the entire US economy would have collapsed. Insurance policies would have failed to pay and everyone would have been bust. Now, through Obama's policies, we have slowed our descent into hell, which is coming in any event. You can't make a bad loan into a good loan if people can't repay as a result of a lack of income. The point is that this will play out to an ultimate low, but it won't be Obama's fault; it will be the fault of normal greed that led to enormous borrowing. That's how all bubbles are formed before they burst. This one will be no different than those of the past. The lows will come at some point. The real question is whether Obama can lead us to a position of saving capitalism through policies that are in many way similar to those of Franklin Roosevelt. Otherwise, expect chaos and revolution; but I doubt that we'll see these latter results. People want solutions and they'll get them from the only possible place: government.

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  7. Scott L.
    Social Security is a great program that Roosevelt used to save capitalism. He got little thanks for the effort, of course. Meanwhile, we can only save capitalism today through national health care. We need a single payer system that reduces cost through the universal availability of preventive care. This can be done, with private doctors remaining in place, being paid by the national government. The system would be paid for by the same premiums that today go to insurance companies who will rip you off, provide poor service, and hope to avoid paying your claims. Obama can make the federal government the single payer that allows a cheaper system to deliver a healthier and less stressed country. It will work; this is a math problem and the math won't work the way we're headed right now. Our current path will bankrupt the country faster than the AIG debacle would have without the Obama bailout.

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  8. Yes, you are right! Obama is a socialist, and by the time he gets through taking over all of the insolvent banks and failed automakers he will have pilfered the best of what our capitalist system can offer! Then all the lazy unemployed people can look to the government for cushy jobs and healthcare while the former CEO’s and other various captains of industry cannot even afford a decent yacht, and will have to travel in their golden Cadillac’s like all the rest of us welfare queens. It’s not fair! The banks were only trying to help poor people get loans, how were they to know that those folks wouldn’t understand or be able to pay their new predatory loan when the interest rate reset, and who would have thought that pooling all those loans labeling them AAA and reselling them would cause trouble?

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  9. I agree with Mark. We cannot expect Obama to swoop in and save the day in just a couple months. Everyone knows you have to go through the stages of recession, depression, etc. Its bound to happen but we can make it to where its not so bad. It is going to happen and we can not keep blaming Obama because he is the one in office, we all know that Bush for the most part screwed our country.

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  10. First, all

    I am leaving on Wednesday for Europe, so if I do get to post at all for the next two weeks, it will be scant. Hope you can keep the debate going without my pithy commentary.

    Now then,

    SJ - since when is GDP per capita all of a sudden THE measure on which we are to judge all economic policies? Now I understand you were rushed, but c'mon. If we look at that same data in 2006, we were 7th. I could just as easily say, "now look at that, from when the Democrats took over Congress and had control of the budget, we dropped 8 places among industrialized nations."

    I know that there is more than just that to the story, but it demonstrates the flaw of just choosing A piece of data to throw out.

    Another thing, you mentioned those other countries are much smaller, but you tried to brush that away. It is a valid point! Luxembourg has been 1st for a while with GDP per capita, but their total GDP is 55 billion (in 2008). Ours, meanwhile, was 14.2 trillion. Size does matter. A few very wealthy businesses can easily skew the "per capita" numbers when you are dealing with such trivial GDP amounts.

    You mentioned Ireland as one of these "socialist" countries that I am warning against becoming...yet Ireland has one of the lowest corporate tax rates in the world. In that respect, I very much want to become more like Ireland!

    Another data factoid that needs to be considered, as Obama himself considers it the most important metric for measuring his policies' success, is unemployment.

    In 2008, according to IMF, the US had an unemployment rate (annual) of 5.81%. The wonderful socialist bastions of Germany, France, and Spain were all at 7.30%, 7.79%, 11.33% unemployment, respectively. You want to be more like Europe? Well you're getting it! Ours is now at 9.4% (april). That puts us right behind Spain for worst among industrialized nations!

    What we should be comparing against is ourselves, since we are unique among westernized countries.
    Average unemployment during Bush's presidency: 5.27%.

    But like I stated in my opening note, the stat that scares me the most among all these economic numbers is this one.

    Which country has the highest debt as a percent of GDP in 2008?

    US, France, Germany, Canada, or the UK?

    United States, at 70.5% according to IMF (slight discrepancy with above numbers, those are from the Whitehouse OMB, you pick which source is more credible).

    To be completely frank and honest guys, I completely disapproved of Bush's crazy spending. But it is flying in the face of any possible sound economic policy for Obama to stand there and compound the problem four-fold while at the same time telling us we are going to return to fiscal responsibility and start "pay-go". Its a lie and its irresponsible. Obama quadrupled our deficit in one year and he is talking about fiscal responsibility.

    Would you please listen to what the man says for once, not just how good it sounds?

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  11. Wow, there is just so much to talk about. I'll take Social Security next.

    @jwc,
    I love your emotional plea for people who have worked hard all their life. And it resonates. I didn't lay out my full suggestion for fixing SS, but understand this: if nothing is done, the scenario of which you speak is bound to happen someday, and it will probably be to YOU! (unsure of your age, but SS is set to run out around 2037 according to the latest estimates).

    If nothing is done to lower the obligations, the promised benefits, we will simply not be able to pay. When that happens, there will be no Pension Benefit Guaranty Corporation for the US SS Insurance program to come in and bail the US out. Drastic benefit cuts and draconian tax raises will be the only possible ways of dealing with the problem.

    I suggest this:

    If you are currently employed and over 60, you will get to retire whenever your normal retirement date is under the current rules.

    If you are 55-60, add two years to your NRD.
    If you are 50-55, add four years to your NRD.
    If you are 40-50, add six years to your NRD.
    If you are 30-40, add eight years to your NRD.
    If you are under 30, add ten years to your NRD.

    Index these retirement dates to adjust as life expectancy improves.

    You have to remember that when this came out in the 40s, people barely lived to 65. Retirement was a short time period in most people's lives. There really is no reason that anyone is entitled to just get to stop working at some arbitrary age just because. If you are still healthy and able, why stop?

    On the flip side, the SS retirement age is not the age you must retire from work, its just the age you'll be eligible for full benefits from your social security. If you can live off your savings and pension from age 65 until age 70 or 75, whatever, then start collecting, fine. The point of SS is insurance, not guaranteed pension benefits.

    Emotional appeals may work on liberals, but I prefer data.

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  12. @ Mark,
    "The US went into its contraction because average people borrowed far too much money."

    Exactly. At the behest of Jimmy Carter, Bill Clinton, Barney Frank, and Chris Dodd through the "Community Redevelopment and Reinvestment Act", average joes who would not have otherwise ever been able to afford a home loan were given them. Banks were coerced by Janet Reno to lend and they were told by the Government that if the loans went sour, they would have the full faith and credit of the US government backing them up.

    Mark, it was Democrat policies that largely led to the problems we are now having. Your well-intentioned, emotional, empathetic, "help the little guy" policies have laid waste to our economy because contrary to what Obama seems to think, things cost money and must be paid for.

    The most recent talk out of Congress is that Obama's healthcare proposal will cost in excess of $1 trillion (wow, seems like such a small number these days). That is $1,000,000,000,000 in addition to the already projected $12,000,000,000,000 worth of debt he is expected to add to our debt total. You say our current problems were caused by average guys borrowing too much?

    Mark, the government is not immune to that same problem!

    I agree that debt was and is largely the problem. Spending, borrowing, and printing more will not fix a damned thing!

    Hoover raised tariffs right at the start of the Great Depression. He presided over that depression for about one year.

    FDR presided over that depression for about 7 or 8 years until World War II bailed him out.

    Frankly, I'd prefer that history NOT repeat itself.

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  13. it took Bush 8 years to destory the economy, but people expect Obama to correct in 8 months. That's crazy! Only time will tell how bad or good Bush really was for this country and only time will time for Obama as well

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  14. "it took Bush 8 years to destory the economy...Only time will tell how bad or good Bush really was for this country "

    But apparently you already know...

    "people expect Obama to correct in 8 months."

    The whole point is, what he's doing will not end up fixing anything! Did you read the whole thing?

    Did you see the numbers from Obama's own website!?!?

    Did you see the part where Scott said Bush spent WAY too much money???

    Bush did a lot of good things but he also did a lot of bad things. We know that, we've already said that.

    Your response to that article shows how naieve you really are. When presented with the facts, that's what you come up with? Why even take the time to post man?

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  15. OK, Scott L., you're missing the whole point, although you almost figured it out without knowing that you were doing it. During the depression, when Roosevelt was trying to be responsible, he didn't spend enough money. However, later, during World War II, he spent what he had to spend, and that pushed public debt up beyond the 120% of GDP mark. Now, did that spending end western civilization? No, it set the stage for the largest and most productive economic advance in the history of mankind. Furthermore, if you'll check your dates, you'll find that government surplus has always preceded huge economic decline. We paid off the federal debt in 1836 and the economy crashed from 1836 to 1843. We ran a surplus in 1969, and that killed the markets and the economy for years. We ran a surplus in 2000; that sure produced a great result. The Japanese ran a surplus in 1989, and that preceded their 15 year depression. On the other hand, we've been in debt mostly non-stop for 200 years, and we're the greatest economic engine on the face of the earth, except during contractions that occur because human beings are greedy. It works great going up, but it's expensive going down. Be educated about economics and markets and you won't pay the price; you'll go short like the Kennedy's and get rich.

    As for the little guy, some help from the government won't hurt. Our great capitalist system, which I love, would be in great danger if we were stepping over dead bodies in the street. The revolution that would follow would not support greater profits.

    Mark Kasen

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  16. Scott L. I was thinking about something you've said in some posts and I did some research. You once said something to the effect of "The New Deal failed and this is why I know what Obama is doing will fail". Please if I am wrong or i have taken it out of context I apologize it was unintentional.

    One of the first things I wanted to point out is that when Academic economist were survey back in 1995 on whether or not the new deal had worked 51% said it had 49% said it had not. (The link below is where I got this stat plus some other talking points.) So my first big question is how can you be so certain that the presidents economic policies will fail when economists can not even come to a consensus on whether or not the New Deal failed?

    The second thing I would like to discuss is the judging of the New Deal as one large entity instead of analyzing the specific parts for merit. Too often it is said the New Deal failed when it should be said that the National Industrial Recovery Act (a part of the New Deal) failed for example. It would be a mistake to say the New Deal failed in its entirety. I believe that the idea that parts of the New Deal failed and other parts succeeded are the most likely reason economists can not come to a consensus on
    whether or not the new deal failed.

    So whats next is a look into what hurt and what helped.

    The National Industrial Recovery Act was suggested as being hurtful by "limiting competition in various industries by setting prices and wages above market levels. The ensuing upward pressure on the price of goods and unemployment may have turned a bad situation worse. While it benefited some producers, the policies meant basic goods were more expensive for consumers and jobs harder to come by for people who were already in dire straits."

    Another potentially hurtful part of the New Deal time was the "soak the rich" rhetoric coming from the Roosevelt administration had a chilling effect on economic growth by making people fear for their property rights. This uncertainty, along with a jump in the top federal income tax rate from 25 percent in 1931 to 79 percent in 1936, may have deterred investment.

    Now one of the helpful parts of the New Deal were the relief projects, which came in the form of the Homeowners Loan Corp., which tried to reduce foreclosures by lowering mortgages (sound familiar?), and massive public-works projects intended to stimulate the economy by putting people to work. "Recovery was just one piece of the New Deal," Rauchway says. "Relief was another piece, and by all accounts it worked pretty well. It kept people from starving." He also notes that a decline in the relief programs was correlated with the downturn in 1938.

    At this pointed I would like to acknowledge that there are some similarities with the 'hurtful' aspects of the new deal and the current economic policies. But there are also similarities to the 'helpful' aspects of the new deal the the current economic policies. And I believe in the same respect there are socialistic policies and capitalistic policies that both have merit.

    Know I've read some of your post and you may say "Andy, I've already explained how it was war spending the bailed us out of the great depression not the new deal" I put forth that spending on a war and spending on public works projects is one in the same. By that I mean both were government funded actions which created a demand in their respective industries and employment responded such that supply could meet demand. If you disagree than please explain to me how government creating a demand for tanks is different than government creating a demand for bridges......

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  17. Now of course I would be an ass if I only brought to light the views that support a more socialistic views so here was one I found against it. It was neither governments massive spending as part of the New Deal or the massive spending in WWII that ended the depression but the end of spending on both at the end of the war that ended the depression. The end of these programs freed up an enormous amount of private capital for private investment, business, individual investment, etc., allowing the market to recover and putting the Depression behind us." This was found on the second link as an argument to the sites author that the deal did work. However, the lowest unemployment rates from 1940 to date for the civilian non-institutional population was from 1943 to 1945. In fact the lowest unemployment rate from 1940 to date was 1.2% in 1944. The total federal spending that year was 106 billion dollars (ten times as much as 1940 when total federal spending was 10.1 billion).

    Government spending relative to GDP after WWII was never as low as it was during the New Deal. In fact from 1933 to 1940 there was a steady decrease in the unemployment rate with the exception of 1938. So you may say the New Deal hindered recovery instead of promoting it but it is clear the economy was recovering during the New Deal.

    So perhaps the New Deal wasn't a complete failure and a Roosevelt didn't need the war to bail him out all I know is if economist can't figure it out why do you believe your right.

    And I'm not trying to attack you or anything I am simply trying to do what I always do which is point out the possible short-comings in your arguments so we may better arrive at the truth.

    P.S. Jon I thought your response to Tyron's comment, while not wrong, was kinda mean.

    Warning I copied some of the text from the articles below because I do not really care to take the time to put it in my own words.
    http://www.usnews.com/articles/business/economy/2008/04/11/did-the-new-deal-work.html
    http://unreasonable.org/node/2230
    http://www.bls.gov/cps/cpsaat1.pdf
    http://www.usgovernmentspending.com/

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  18. Mark,

    It seems from your comments that you agree with the huge debt Obama is adding to our already out of control debt.

    Let me be clear.

    One) Some amount of government spending on appropriate projects CAN sometimes be beneficial, but it is not preferred over allowing the private markets to do that spending instead.

    Two) The difference between what Obama's stimulus is set to do versus what the War spending in WWII did is this: In WWII, everyone was working and producing goods and services. The money being spent by the government was actually creating demand for goods and services which led to a demand for workers. As Andy pointed out, the lowest unemployment rate in history was in 1944...at the height of the war effort.

    Before the War, Roosevelt was pissing away money left and right on these silly "make work" programs, like digging a ditch and then filling it back in. That is just WORK. Different from JOB, from CAREER.

    Mark, our country has almost always run a debt, that is true, but before the 1960s, we've always paid down most of that debt during the generation in which it was run up. Over the past 40-50 years, we have not decreased out debt, largely due to the disasterous social programs instituted by Roosevelt. Once you promise people other people's money, its very difficult to take that away.

    Government spending on redistribution programs DO NOT create wealth or demand; they merely shift it.

    Government spending on (sadly enough) BULLETS creates a demand for a product. This is why the war brought us out of the great depression, not Roosevelt's liberal redistributive policies.

    All of this is purely academic however. Obama is running up COMPLETELY UNPRECEDENTED debt levels.

    The freakin' Chinese are talking about stopping the purchase of our debt. We are discussing "monetizing" the economy at the Fed (printing more money to pay for Obama's debt). The discussion of new tax increases has begun (VAT tax, anyone?) The house passed the 2nd most ludicrous piece of legislation it ever could (number one would be nationalized health care) in that insane Cap and Trade bill.

    How can you defend the purposeful ruination of the once greatest economy on the planet?

    I have discussed in the past the difference of magnitude. What FDR did was huge. What LBJ did was worse.

    Obama is like a 10.0 on the richter scale compared to their 5.0 and 6.0 when in comes to the quakes he is causing in our economy.

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  19. I simply do not see how you can contribute 8 years of decline in the economic status to President Obama. Mr. Bush is the president who got us into this whole mess, including the war in Iraq. How can anyone expect Obama to pull this country out of a recession in six months?
    It took us 8 years to get to this horrible point with the deficit and the unemployment. I am just guessing here, but I do not think we can pull out of an 8 year mess in 1.

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  20. I do not agree with the government taking over healthcare. That puts a lot of people out of jobs and adds to the mess we have. I think they should have made some changes to medicare and medicaid to benefit a broader spectrum of people that do not have insurance. I believe that if we give the government too much power we lose our freedom and rights.

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  21. "I simply do not see how you can contribute 8 years of decline in the economic status to President Obama."

    Timkim, the premise of your comments are totally flawed.

    The Bush economy was, for about 5 years, booming. He also inherited a recession, as The One touts constantly, but he didn't cry about it at EVERY FREAKING NEWS CONFERENCE!

    Bush also had to weather the largest terrorist attack on American soil ever, not a small task. His tax cuts in 2001 and 2003 incentivized booming growth. Yes, he did get some help toward the latter part with the housing bubble. He warned Congress about that, but was denied on several occasions.

    It wasn't until after 2007, when the Dems took control of Congress, that we started to see some signs of slippage. Then, we came to the crossroads where Bush abandoned free markets and did TARP, which was about the worst thing he did for our economy.

    My point is, doubling or tripling down on what FAILED is a STUPID idea, unless the crisis is intentionally being propelled. That is my problem with Obama.

    If Obama had stepped in, removed onerous government regulations, reduced taxes and cut some spending, we would be around the corner from this recession by now. He owns this mess.

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  22. I don’t think anyone should blame Obama for the way our economy is right now. Yes I know our economy sucks right now but that is why the unemployment rate is so high. Jobs are laying off people because the citizens are not supporting their business. Citizens can’t buy business’s products because the prices on everything are going up. Obama is trying to help our country. Starting in June 2009 minimum wage went up to $8.00 per hour. Obama is also trying to help the employment rate. He is trying to find jobs for people but the only thing this does is increase our national debt. The national debt is never going to go away. Our country is always going to be in debt and we need to accept that. There are so many things that the government needs money for that is unnecessary. But because the government has the power, they can do it. One of the things that are unnecessary sometimes is construction on highways and interstates. Half of these roads don’t need any work done to them so why are they messing with them. These issues are going to be never ending. Everyone should have a chance to prove themselves and I don’t think people have given Obama enough time to prove himself to us.

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