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At that stage you were blaming the sub-prime mortgage crisis on the FHA-guaranteed loans, which turned out to have been fine. The whole of the blame turns out to have fallen on the dodgy loans made by banks who were even less discriminating in their choices of borrowers.

This doesn't suggest that the rest of your vapourings should be taken seriously.

Stimulus spending is an rational way of coping with irrational behaviour. You've got to spend enough that people will notice. The nice tractable perfect-market models are linear, and effect is proportional to cause. The real world is more complicated. Hoover's stimulus spending was simply inadequate. Japan spent the "lost decade" in recession because nobody was brave enough to declare Japanese real estate to be grossly over-valued and face the paper losses that this would have entailed.

The Greek problems don't have anything to do with stimulus spending as such. Their government was spending a lot more than it collected in taxes, but it wasn't doing it to stimulate the economy, which was running close enough to capacity for this to be perfectly unnecessary, but because it was an incompetent tax collector. The same high levels of corruption that disabled the tax collection system presumably meant that the government spending was misdirected, much as US defence spending is mostly corporate welfare

When James Arthur is doing the accounting.

Since the inability to do that particular calculation rests of the inability of most Americans to share James Arthur's economic delusions and blind-spots, one is grateful that the ability is not widely shared. Enough of the well-off share enough of James Arthur's delusions to imperil America, but the 99% should be able to save their country and it's economy from the consequences of rampant economic inequality - worse than Russia's and not far behind China's.

--
Bill Sloman, Sydney

You seem to not understand the concept of value added. Suppose someone owns a plot of land that is worth a certain amount. He could cut the trees and have the firewood for sale, which is worth much more because of the processing. The land itself may now be worth even more if he clears it so that it could be used for building homes, or it could be farmed and produce crops that increase the value and can produce an annual income. There will be costs involved, such as tools and energy, but the tools are a durable

investment which retain value, and the energy could come from solar, wind, or biofuels, or even from water power and his own human labor.

This is not over unity. It simply illustrates that the value of something can be increased significantly with the expenditure of much less, so the

overall value increases, and the economy of that isolated sector thrives.

The larger economy of the nation and the world is more complex, but the same principles apply. Many businesses rely on artificially inflated valuation of non-essential goods, such as cell phones and entertainment devices, so they can be produced for very little and sold for many times their cost, adding value and wealth to the economy. The more confident people feel about the future, the more willing they are to spend money rather than save, and the benefits spread to cause growth. As long as the money keeps circulating, it can essentially increase the total value, especially when purchased on credit. The danger is that a sudden collapse of any part of this mechanism can cause a severe slump, and it can be catastrophic if there is a general feeling of doom and gloom.

The economy IS irrational, and that makes it difficult for many to understand. I had a hard time with that when I studied economics over 40

years ago. I did well with microeconomics, which was more scientific, but macroeconomics involved perceptions and speculation and human factors that are not as predictable as most scientific and engineering systems. It involves psychology and sociology more than mathematics, physics, and chemistry.

I can well understand why the members of the 1% want to promote their theories of business and economics, as it has served them well in the past and they can still extract a bit more for their own edification before the middle class collapses. But I don't understand why so many people here, who I doubt comprise that privileged minority at the top, accept their interpretations, and especially when engineers and technicians with supposedly good education in science accept so many of the severely flawed and speciously derived "theories" that promote continued and increasing energy usage and decimation of the environment. Follow the money. It seems that far too many people have been brainwashed into thinking that their own individual accumulation of wealth and material goods will actually make them happy. The more you have, the more you have to lose, and you can't take it with you. At least you should consider the generations of the future who

will have to deal with the scarce resources and spoiled environment left by the "last of the moneygrubbers". Do you wish to leave that legacy?

Paul

Yes, but he's old & quite senile, so they have to prepare his replacement while they still have time.

excavation

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Poxy hell Paul, are you just now beginning to see this? (You clearly haven't thought it through very well.) My dad saw this in the 1960s and discussed it with me, and i was barely a teen. Just the same he could see that it would be "my" generation (though not "our" children's generation {and now very probably "our" grandchildren's generation}) that would have to really deal with this. Guess what, both "our" and "our" children's generation are defaulting. I suspect that you can now figure out what this will mean.

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The long standing (about 60 to 70 years) mantra of non-playing captains of industry (destruction of promote from within vs hire outsiders that know nothing of the particular business) and stupid trade unionism (UAW) has hugely helped bringing us this.

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Sure does. But the has been's have to make room for a large crowd of new claimants.

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Wow, what a prejudiced commentary. Obummer reads a teleprompter well, that and being a muckraking rabble rouser seems to be about the sum total of his skills. If O was really any good he would have solved the recession already, as he promised.

And finally consider the alternative again

>?-)

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I'm not wrong. Deficit-financed Keynesian stimulus spending isn't financed out of current revenue precisely to avoid the negative effects you claim it creates. Since you are a functioning as a brain- dead spam-bot, repeating the same old arguments without addressing any of the issues other people raise, you aren't in any position to complain about "rudeness".

it.

It doesn't take much study to know that you are generating repetitive nonsense. What you want is for me to give up on critical thinking and leave you free to broadcast nonsensical propaganda without the occasional reminder that your economic tool-kit was furnished sometime before Marx was born and hasn't been updated since.

How? Governments shouldn't borrow money?

--
Bill Sloman, Sydney

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   ...Jim Thompson

ew

Josephkk is too modest to put forward his own claim on the title, and it is true that while he is a right-wing nitwit, he's not quite as right-wing as Jim Yanik, nor as much of a nitwit as Jim Thompson, but he does post more than his fair share of inanity,

--
Bill Sloman, Sydney

Mike Terrell apparently doesn't appreciate what senile means - one of those weaknesses of a mental faculty that he's probably been exhibiting since he was a physically healthy youth.

--
Bill Sloman, Sydney

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A muckraking rabble rouser would be a multiple skills tradesman, if he existed.

A muckraker is a journalist who is good at digging out and exposing scandals. Obama was never a jornalist.

A rabble rouser is a politician who can enthuse a crowd (which Obama can do - and very well) and persuade them to be have in a disorderly way (which Obama never has).

I'm afraid that josephkk has just made his bid for the position of the groups tame idiot. He's not going to displace Jim Thompson for a while, and there's quite a lot of competition for second place too, but he's definitely reminded us that he is a right-wing nitiwit.

With a Tea Party majority in congress, being merely good isn't enough. The electorate may have been bright enough to elect - and re-elect - a clever president, but they were dumb enough to leave a Tea Party majority in congress.

--
Bill Sloman, Sydney

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What you miss with your argument is that NO ADDITIONAL PEOPLE ARE EMPLOYED by the scheme. You've simply re-allocated $xxx in employment from established private industry into (fewer) temporary Davis-Bacon projects, at less than 100% efficiency. It's a net loss of jobs.

Further, this forcible reallocation of resources guarantees more production of things people didn't want, at the expense of things they did. It's a diminution of production of desirable goods and services.

The damage done to private industry is lasting; the less-than-unity gain stimulus is temporary.

Yes, the object is to employ people, usefully. Not in make-work.

When the gov't funnels other people's money into a field, they've / made that/--that's make-work. The gov't has thereby decided that that new object is more noble and necessary than whatever everyone else was doing, so they shift jobs from one to the other.

They also impose requirements, raise wages and benefits, dissipate a fraction, and do other things that result in fewer people being employed for the same money; a less-than-parity transfer of employment. IOW, net jobs are lost.

It obviously hasn't, doesn't, and won't increase business confidence. The gov't is taking from them, to produce non-useful results that don't replace the takings. They're not stupid.

If you knew history, you'd know Hoover was a stimulus guy--he rocketed up spending, as did Bush. They started it. Unemployment didn't get really bad until FDR ratcheted spending up even more, like TODAY.

The "stimulus" is the /reason/ for the malaise. IT'S UNDER-UNITY. It reallocates production from useful stuff to non-useful, chosen/decided by pols.

If deficit stimulus worked, how could any country be in debt? The stimulus spending should rocket them out of it. Instead we've got most of the developed world doing that, yet up to their eyeballs, and not getting out. Ever. For decades.

How would it even be possible for Greece--spending money on pensions and social programs like Obama--to be in such trouble? Where's the predicted Greek GDP explosion?

When Greece, France, Italy, Spain, and other nations finally run out of borrowing power, how will their people have been served? What cold consolation, those benefits they promised but can never deliver, to the retirees, the poor, the hungry of that day?

James

And who is it that is aggravated ?>:-} ...Jim Thompson

-- | James E.Thompson, CTO | mens | | Analog Innovations, Inc. | et | | Analog/Mixed-Signal ASIC's and Discrete Systems | manus | | Phoenix, Arizona 85048 Skype: Contacts Only | | | Voice:(480)460-2350 Fax: Available upon request | Brass Rat | | E-mail Icon at

| 1962 | I love to cook with wine. Sometimes I even put it in the food.

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Your school-girl naviete is being befuddled by the borrowing. That's a separate transaction that's irrelevant to the fact of the taking. To a zeroth order, it doesn't matter if they borrow the money from MARS--WHO HAS TO PAY IT BACK? The taxpayer. Specific taxpayers.

That's the taking, merely delayed in time. It's still a taking--you're taking someone's property. That it's now or two years from now doesn't change that.

Heaping more costs on the participants does NOT STIMULATE THE ECONOMY. Deferring the cost a couple years DOESN'T FOOL THEM.

Okay, next we'll address the third-party transaction, the borrowing (which is nothing more than deferring the taking in time).

That's a complete demonstration of ignorance. Of COURSE IT'S BEING USED USEFULLY. The mere fact that it's available for loan demonstrates that.

That the gov't depletes this fund--making it less available to other purposes and citizens who might need it--evinces a further, active HARM to the economy.

Cheers,

James Arthur

Just sniping, though, doesn't persuade anyone. It's not going to save the country.

--
Cheers, 
James Arthur

[...]

Anyone curious about the wheres and whys of such events might enjoy this book:

Nassim Taleb / The Black Swan: The Impact of the Highly Improbable

His latest book ("Antifragile: Things That Gain from Disorder") also looks good, but I'm reluctant to comment on it as I only just started reading it.

Enjoy...

Frank

--
  When political claims are analyzed as if they were moral absolutes, 
  the balancing of interests and questions of expediency that are 
  central to the art of politics yield to unjustified certainty and 
  impractical extremism. 
      -- Richard Thompson Ford / Universal Rights: Down to Earth

.... unless you are a Monetarist, and then all that makes perfect sense. Milton Friedman was a (Market) Monetarist.

The markets agree with market monetarism ( hence the name ) so...

You can't use basic double-entry accounting to explain government finance. If that were true, the ... 20 or so years following WWII would have been worse than the Great Depression...

What if it's all just poorly implemented instrumentation of how the money supply is managed?

All that *sounds* good, but there's most likely a larger misunderstanding at play. IMO, anyway.

--
Les Cargill

The things that are "collapsing the middle class" ( this isn't really happening, so ... ) have almost nothing to do with any of this. If anything,, the equilibrium in Galbraith's "Modern Industrial State" collapsed on its own - the large firm didn't work out. But since then, being "middle class" has largely continued, except where the marginal product of labor for a job hits a constant or declining value.

The 1% should not be able to promote *anything*. It's much more widely held than that. People know for a fact that the cure for poverty is a job, and that unions and such won't really help that much.

While it's true that some media organs are owned an run by 1% ( all, really ) that doesn't mean that that message is competitive because they want it to be - it's competitive because people think it's so. That's probably mostly enlightened self-interest.

As opposed to what? What else is there? Government policy can only "create jobs" in very constrained circuimstances, and those circumstances are impossible right now. It's really only defense and CCC type things that "create jobs".

Defense right now is a horror. You can't get anything done. Those I know who do it are in terrible shape.

Well... that's basically Liberalism for you. Big-L Liberalism, as opposed to old-school Toryism ( pre-Burkean Toryism ).

The previous generations done the same to us :) No, we all do it - there's little choice, really...

--
Les Cargill

Jim Thompson only proposes to start sniping his neighbours after the country has fallen apart in some kind of violent revolution - when presumably it would be beyond saving.

Glorying in the idea of using your gun to shoot your neighbours - even if only after the country has fallen apart - isn't going to do anything to prevent the apocalypse.

Neither is touting flat earth economic solutions as if they were received truth, rather than extremist delusions.

--
Bill Sloman, Sydney

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Sure. But they don't have to pay it back immediately, and in fact they get to pay it back when the economy has recovered appreciably. AT the moment the US economy is growing at something like 2% per year whereas without the stimulus it would have been shrinking at 6% per year since the end of 2008, just it started doing in 2008, and just as it kept on doing for the three years of the Great Depression.

Taking that into account isn't naive. Ignoring it would be stupid - which you aren't - or dishonest, which seems more likely.

Allowing a the economy to shrink at 6% per year is taking on a rather larger scale. Each business that fails and closes it's doors is an asset that was worth a lot more when it was a going concern. The employee experience that kept it running smoothly when it was a going concern is dissipated as soon as the employees are fired, and the fixed assets that were put together to support that particular operation have got to be sold to anybody who can use them for what the buyers are prepared to pay.

You keep on telling us this, but it happens that Keynesian deficit funded stimulus spending is stimulation your economy at the moment - though not to the level of economic activity that you want - GDP growth of between 3% and 4% per year, rather than 1% to 2% per year. You seem to be incapable of recognising this and the more interesting question is about what is fooling you into this massive denial of reality.

If it's available to loan, it's not being used.It makes sense to keep an easily accessible nest-egg to cope with unpredictable and unexpected costs, but money lent to the government can be used to guarantee a bank loan and thus serves exactly this purpose.

How? It's certainly less available - but not much less available - and the whole point of, and problem with, recessions is the loss of business confidence which discourages people from investing their money in the first place. The damage that you claim the borrowing does is actually of the same kind as the damage caused by the fact of the recession.

Effectively, you are claiming that the government borrowing money that might have been invested - but wasn't being invested - damages the economy by preventing the investment that wasn't taking place. Effectively you want to not have your cake and not eat it too.

Looked at another way, this is dog-in-the-manger capitalism. Some people have got capital, but they refuse to invest it until all their competitors have gone bust, so they can buy up the best of their plant, and hire the best of their employees and make a killing as a monoply supplier - admittedly selling into a much smaller market. As a running dog of this kind of beggar-my-neighbour capitalist, you reject the entirely practical Keynesian scheme for blocking this profitable, but anti-social tactic. You reasoning is defective, but as Karl Rove has demonstrated, a lie doesn't have to be all that plausible to be effective.

--
Bill Sloman, Sydney