by Frank James
Here's a scary thought. The federal government could spend a trillion dollars or more on economic stimulus and it might not even work.
That's because the effectiveness of the federal government pumping vast sums of money into the economy is an idea that hasn't ever truly been tested.
Wait a minute. Wasn't such massive spending proven to work during the Great Depression by President Franklin Roosevelt?
Well, not exactly. It seems like everywhere you turn, you can find opinion pieces, especially but not exclusively by conservative-leaning thinkers, that persuasively argue that the New Deal failed to end the Great Depression.
Take, for instance, a piece in today's Wall Street Journal by Harold L. Cole, an economics professor at the University of Pennsylvania, and Lee E. Ohanian, an economics professor and at UCLA.
An excerpt:
The goal of the New Deal was to get Americans back to work. But the New Deal didn't restore employment. In fact, there was even less work on average during the New Deal than before FDR took office. Total hours worked per adult, including government employees, were 18% below their 1929 level between 1930-32, but were 23% lower on average during the New Deal (1933-39). Private hours worked were even lower after FDR took office, averaging 27% below their 1929 level, compared to 18% lower between in 1930-32.
Why was this? Cole and Ohanian assert that the Roosevelt Administration was heavy handed in its command and control of the economy, which wound up backfiring.
So what stopped a blockbuster recovery from ever starting? The New Deal. Some New Deal policies certainly benefited the economy by establishing a basic social safety net through Social Security and unemployment benefits, and by stabilizing the financial system through deposit insurance and the Securities Exchange Commission. But others violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. All told, these antimarket policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.
As Amity Schlaes, a senior fellow at the Council on Foreign Affairs wrote in an opinion piece in the Washington Post, Roosevelt's experiment was so ineffective overall in kick-starting the U.S. economy of the 1930s that even New Dealers threw up their hands.
A snippet:
Even the New Dealers despaired. "We have tried spending money," Treasury Secretary Henry Morgenthau said to the House Ways and Means Committee in the late 1930s. "We are spending more than we have ever spent before and it does not work. . . . I say, after eight years of this administration, we have just as much unemployment as when we started . . . and an enormous debt to boot."
Some might be tempted to dismiss such observations since they don't track with the commonly held view that Roosevelt's New Deal spending ended the Great Depression. But that would be a mistake.
It's true that Roosevelt did adapt the theories of economist John Maynard Keynes to his purposes. It was Keynes who pioneered the idea of the government creating demand in a struggling economy by pump priming -- spending large sums to stimulate otherwise stagnant economic activity.
But a lot of experts believe Roosevelt never spent at the levels Keynes prescribed and that because of that, the New Deal didn't provide the hoped-for jolt.
National Public Radio's "Planet Money" program explored this piece of history recently.
An excerpt:
Did Keynes Cure The Great Depression?
Like lots of fellow Keynesians, (Alan) Blinder (a Princeton economist) says Keynes' theory played out in the 1930s, with government spending pulling America out of the Depression. That's become the standard line in school textbooks. But Keynesians say it wasn't so simple as President Franklin Delano Roosevelt getting inspired by Keynes and spending his way out of the crisis.
Yes, Roosevelt expanded government spending, with an alphabet soup of programs. But he never spent as much money as Keynes said he should have. He also did all sorts of things that Keynes opposed, like raising taxes and trying to balance the budget. Keynes said those steps would cancel out any positive effect from spending. Roosevelt bothered Keynes so much that the economist sent him at least one scolding letter.
Then, finally, geopolitical events took over, and World War II forced Roosevelt to spend as much money as Keynes wanted.
So what are we left with? Essentially, we have a lot of people who believe, wrongly, that in the New Deal we have a model of success that we would do well to emulate.
But the New Deal wasn't what it was cracked up to be, at least, it wasn't what we learned it was in school, the cure to the ailing U.S. economy of the 1930s.
Thus, we're really in uncharted waters. We clearly have an economic theory that's never been tested to the degree we're about to test it. It is really a shot in the dark.
As Keynes might have said: "In the long run we are all dead" so this is only a temporary problem, more or less.
But the thought that no one can say for sure that pushing $1 trillion or more of government spending into the economy will rev up the economy so that it once again becomes an employment engine is just one more chilling thought in an economic period full of them.
Comments
Are you sure this is Frank James writing this piece? I mean, it seems intellectually honest in a way that is most uncharacteric for Frank. Odd stuff indeed.
Posted by: Vast Right Wing Conspirator | February 2, 2009 4:25 PM
Less we forget Roosevelt put people to work improving the country WPA, CCC and etc. not stimulus to sit on you know what.
Posted by: Inky | February 2, 2009 4:34 PM
Frank, any student of modern economics knows the FDR New Deal policies being successful is nothing more the liberal hype and misinformation of history. Obama's is quietly allowing the Democratic House Porkulous to proceed while giving lip service to bipartisan ideas. The American folks are not buying it! I'm sure you have received your email, video, and instructions for your Super Stimulus Weekend party, please enlighten us conservatives on what we need to know!
Posted by: Bubba Porter | February 2, 2009 4:40 PM
Obama's is quietly allowing the Democratic House Porkulous to proceed while giving lip service to bipartisan ideas. The American folks are not buying it! I'm sure you have received your email, video, and instructions for your Super Stimulus Weekend party, please enlighten us conservatives on what we need to know!
Posted by: Bubba Porter | February 2, 2009 4:40 PM
.....
Let me get this straight. Republicans, who oversaw one of the largest expansions in government spending in history are now concerned about spending? According to the CBO, total government outlays under Bush and the Republican controlled Congress from 2001 - 2006 increased from $1.8 trillion to $2.4 trillion -- that's an increase of 33%.
http://cbo.gov/budget/historical.shtml
At the same time -- again under Republican rule from 2001 to 2006 -- the total debt outstanding increased from $5,807,463,412,200.06 at the end of fiscal 2001
http://www.treasurydirect.gov/NP/BPDLogin?application=np
To $8,506,973,899,215.23.
http://www.treasurydirect.gov/...
And now Republicans who helped to oversee this are complaining about spending? Excuse me?
A note to Flubba Porter/Republican idiots. The equation for GDP is simple. Here it is:
C+I+E+G = GDP.
In case you are confused, those are symbols. Let's explains those symbols for you.
C - consumer spending. This is now in the tank. Personal consumption expenditures are now negative year over year. Retailers just reported a terrible Christmas. In other words -- 70% of our economy is out of order right now.
I - Investment. This has been neutral for awhile. You may be familiar with the housing bubble? (Actually, you probably just became aware of it because you were probably saying the economy was sound until recently). Well - there was a housing bubble and it has crashed. As a result, total investment has been weak for some time now.
E = net exports. The US runs a mammoth trade deficit, so this ones out as well.
That leaves G -- as in government spending -- to pull us out of this mess. Unless of course you like depressions you dolts.
Posted by: your worst nightmare | February 2, 2009 5:12 PM
The Repugs want this bill to fail. They don't give a damn if the economy (America) fails, it's all politics to them and they see this as a way for them to come back into power.
They all think the same way fatso Rush thinks, only they aren't stupid enough to say it out loud like he is.
Obama and the Dems have already given up WAY to much and in my opinion they should take back most of it and announce that they are doing it because the Repugs are bargaining in bad faith, which they are.
Posted by: Hey Joe | February 2, 2009 5:16 PM
We should have enacted that plan that George bush and the Congressional Republicans worked so hard to pass in the last months of his term to afdress the recession. Their solution. You know the one....it said....ummm...it was going to use money to...ahhh...oh, never mind.
Posted by: Republicans have no plan, just NO. | February 2, 2009 5:25 PM
Unemployment stood at 25 percent in 1930 and was down to 100 percent in 1937, when FDR cut back on spending. By 1940 it was back up to 16 percent. This would be a great time for a natural experiment. All states with Rebublican governors should refuse to accept Federal economic assistance.
Posted by: Tom | February 2, 2009 5:26 PM
Unemployment stood at 25 percent in 1930 and was down to 100 percent in 1937, when FDR cut back on spending. By 1940 it was back up to 16 percent. This would be a great time for a natural experiment. All states with Rebublican governors should refuse to accept Federal economic assistance.
Posted by: Tom | February 2, 2009 5:27 PM
The stimulous package is more of a shot in the foot.
Posted by: bdd | February 2, 2009 5:32 PM
"...intellectually honest in a way that is most uncharacteric for Frank. Odd stuff indeed."
Posted by: Vast Right Wing Conspirator | February 2, 2009 4:25 PM
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I disagree. FJ is nothing if not intellectually honest when he writes about the important questions. (Of course I don't count the obvious puff pieces.) That's why he gives droolers like John E fits. And on that subject...
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Posted by: Hey Joe | February 2, 2009 5:16 PM
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You're dead wrong, John E, as usual. Republicans don't want Obama to fail.
Posted by: MJ | February 2, 2009 5:32 PM
Frank needs to dig a little deeper and do his homework. Take the Amity Shlaes piece, for example. She does not count as employed everyone who was employed by WPA, CCC, etc. Instead, she counts them as unemployed. This is not clear from Shlaes piece, but do a little digging, and you will find it's true. Also, unemployment fell at an average rate of 5% a year from 1933-1937. The employment rate was not a miraculous recovery, but we were starting at 25%. Moreover, check out other econmic indicators - durable goods, for example, which rose at a steady pace from 1933-1937, until Roosevelt unwisely raised taxes and tried to balance the budget. The truth is, the issue is not that murky. It's Frank's brain that is a little murky, made so by his failure to dig deeply enough into the facts.
Posted by: Chris W | February 2, 2009 5:33 PM
The stimulus package is a misnomer for the ramrodding of special interest spending that will have no economic benefit whatsoever.
This is not to be entered into just to appease Obama.
The reality is it will take time and the public to start spending again. Real estate dragged us down, and it will pick us up when people start buying again.
The government spending the money, then taxing us to pay for it, does not stimulate anything but government spending.
Posted by: Realist | February 2, 2009 5:43 PM
What a sad article. Gosh nothing will work. We just have to let the economy sort itself out, and apply them unregulated free market principles and things will just sort of straighten out because markets are good and pure and eat apple pie. Truth is, WW II decisively ended the depression. Why? Because it was the largest public works project ever. Consumers are tapped out, businesses aren't going to spend money, and noone can get credit anyway. Obviously the Government needs to step in.
And if Obama gets this mess straightened out? End of GOP as we know it. And not a minute too soon.
Posted by: Joe | February 2, 2009 5:45 PM
You're dead wrong, John E, as usual. Republicans don't want Obama to fail.
Posted by: MJ | February 2, 2009 5:32 PM
Really? That's not what the leader of the House Republicans says:
.
http://thinkprogress.org/2009/01/20/limbaugh-obama-fail/
Posted by: ajsalcny | February 2, 2009 5:46 PM
Posted by: Inky | February 2, 2009 4:34 PM
.
Posted by: Bubba Porter | February 2, 2009 4:40 PM
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Inky, you're right. Bubba, you're partly right.
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Seems to me that the importance of FDR's presidency was the massive social changes (eg workers' labor legislation, social security) and the establishment of the idea of Government assuming social responsibility. That type of governance is now a given. Hear, hear!
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The Great Depression, however, seemed to have him stymied.
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That said, IMO a responsible stimulus bill seems like our best bet -- that is, a reasonable combination of tax cuts and CREATIVE spending programs. Unfortunately, that doesn't seem to be what the Democrats are delivering.
Posted by: MJ | February 2, 2009 5:49 PM
FDR's "programs" added about 7 years to the Depression. See this UCLA research:
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx
Today is different, but some things are the same. Maybe because of communications and a lot more information, Obama's policies will only add 5 years on.
Regardless, Obama's policies of increasing taxes and regulations while trying to recover will make it very hard to recover.
Expect unemployment to shoot way up. The areas governed by the most liberalism will be the hardest hit.
Posted by: Alz | February 2, 2009 5:49 PM
Opps, I forgot to mention. The reason this story is being run so as to lower everyone's expectations.
Obama himself says this will take years. But what no one will tell us is the reason is they (Obama and the other liberals) are putting us through a process to convert the economy to a Obama's version of Socialism.
When he talks about "sacrifice", what he means is that we are all to sacrifice success and future success so we can all be "equal". You never hear the liberals talk very positively about the American Dream.
And when Obama talks about "hope", what he means that we are all to hope that things don't get too bad for us while they force the Socialistic transformation on the Country.
The problem for them is that people expect things to get "better", but for liberals like Obama, they don't want things better, they want things "equal".
It's no joke. Expect a lot of pain.
Posted by: Alz | February 2, 2009 6:10 PM
IMO a responsible stimulus bill seems like our best bet -- that is, a reasonable combination of tax cuts and CREATIVE spending programs. Unfortunately, that doesn't seem to be what the Democrats are delivering.
Posted by: MJ | February 2, 2009 5:49 PM
Herbert Hoover fan,
The new New CBO report out today totally debunks GOP stimulus talking points
The CBO just came out with a report about the Senate Stimulus plan and it shows that 78% of the $884 billion will be spent during the first 18 months.
http://cbo.gov/
The Obama administration vowed that they wanted at least 75% of the money spent from a stimulus package should be spent within the first 18 months.
The House version of the bill was found by the CBO to spend out 64% of the money in the first 18 months. As a result, GOP put out the talking point that not enough of the stimulus package would be spent quickly enough.
Now the CBO has looked at the Senate version and they have found that $694 billion of the $884 billion will be spent out in the first 18 months after it is enacted. This results in 78% of the money being spent which is better than House version of the bill.
http://cbo.gov/ftpdocs/99xx/doc9977/hr1senate.pdf
Expect this information to be a talking point by the administration over the next few weeks as the Senate debates the bill.
I personally was VERY ENCOURAGED by all the Senate Republicans saying that they wanted more infrastructure spending in the stimulus package. I felt it was just too little so that is very encouraging. I also felt that the tax credit for new homeowners of $10,000-$15,000 when buying a new home was also encouraging.
Slowly but surely the Senate bill will get better and better.
Expect some of the "controversial" spending programs to be removed ie Smoking cessation education, STD prevention education, etc. Although worthwhile, they will be placed in other spending bills and not this one. Expect MORE infrastructure spending to be inserted possibly as high as $30 billion. Expect some help for homeowners to be inserted as well. Expect more emphasis to be on creating JOBS JOBS JOBS.
Posted by: Lars Greko | February 2, 2009 6:12 PM
"That's not what the leader of the House Republicans says."
Posted by: ajsalcny | February 2, 2009 5:46 PM
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Rush Limbaugh is a Talk Radio jock whose shtick is to annoy people. He's not the "leader of the House Republicans". In fact, the source you cite as supposed "proof" quotes Limbaugh chiding Republicans for hoping the Obama administration succeeds. Grow a brain.
Posted by: MJ | February 2, 2009 6:15 PM
The New Deal spending-binge of the 1930s that Obama so proudly emulates was, in-fact, a colossal economic failure. FDR never achieved an unemployment level under 14%… and averaged 17% over his presidency.
This is all in stark contrast to the proven Reagan Recovery of the 1980s, which brought us back from almost 11% unemployment (50% worse than today), plus double-digit inflation and interest rates.He accomplished this with an adherence to the Chicago School philosophy- with spending cuts and tax cuts, in addition to deregulation and incentives for small businesses and entrepreneurs.
Ronald Reagan created over 20M jobs…growing the country’s real GDP by almost 30% in the process. Those kind of results makes one wonder why Obama’s trillion-dollar spending plan would impress ANY-body, with his pledged 4M new and “saved” jobs (whatever those are)… a paltry figure 16M jobs shy of The Gipper’s towering accomplishment.
A $500B tax cut would be far more effective, allowing American business to create the jobs they've repeatedly demonstrated the ability to produce, and actually create wealth… instead of just moving it from one pocket to the other.
This "recovery" plan of Obama is nothing but a specious, socialist Trojan-horse. To quote Rahm Emanuel: "no great crisis should be wasted"
http://reaganiterepublicanresistance.blogspot.com/2008/12/biden-runs-interferrence-for-big.html
Posted by: Reaganite Republican | February 2, 2009 6:16 PM
Regardless, Obama's policies of increasing taxes and regulations while trying to recover will make it very hard to recover.
Posted by: Alz | February 2, 2009 5:49 PM
Dear Alz Hiemer...I must have missed the part about a tax increase...please post.
Posted by: bill r. | February 2, 2009 6:21 PM
FDR's "programs" added about 7 years to the Depression. See this UCLA research:Today is different, but some things are the same. Maybe because of communications and a lot more information, Obama's policies will only add 5 years onExpect unemployment to shoot way up. The areas governed by the most liberalism will be the hardest hit.
Posted by: Alz | February 2, 2009 5:49 PM
....
I love watching the Repub noise/propaganda machine in action. Now they're busy trying to rewrite the FDR history.
Does this mean that now we're supposed to hold up Herbert Hoover as an economic expert of historical proporations too?
Since when did rightwing lunatic fringe ever let the facts get in the way of their agenda? The problem isn't that the Crowleys, Limbaugh's, Hannity's, O'Reillys and Roves spew their rhetoric without facts to back up their stance. The problem, is that the uniformed robots on the right (Alz), believe everything these demagogues say. How else can you explain "W" getting elected for a second term?
Uninformed voters shouldn't vote. I'd rather see 10% turnout at the polls with voters that are well informed, than 80% turnout of the uninformed.
The economic sag in '37-'38 was due to FDR buckling to right wing power brokers. The right's stance on the auto bailout debacle should be all anyone needs to see to realize that they will stop at nothing to bring down the new administration.
Posted by: Republican Oligarchy | February 2, 2009 6:33 PM
Thank you, Frank James. This is the kind of clear, non-ideological thinking and discussion that Obama professes to support and that will be essential to recovery.
But what you didn't mention is that unions were empowered to counter the monopoly power granted to business, which was struck down as unconstitutional. It was only after union power to limit jobs by driving up wages through disruptive strikes was controlled by the federal legislation in 1947 that recovery bloomed. This is certainly no time to give unions unfettered labor market share by removing employees' right to vote in fair and free secret-ballot elections on whether they want a particular union.
Posted by: Open Mind | February 2, 2009 6:38 PM
Mr. Worst Nightmare, a retort to an excerpt of yours:
C+I+E+G = GDP.
In case you are confused, those are symbols. Let's explains those symbols for you.
C - consumer spending. This is now in the tank. Personal consumption expenditures are now negative year over year. Retailers just reported a terrible Christmas. In other words -- 70% of our economy is out of order right now. --- and why is this? Perhaps in part to the faltering job market as more jobs have been shipped overseas?
I - Investment. This has been neutral for awhile. You may be familiar with the housing bubble? (Actually, you probably just became aware of it because you were probably saying the economy was sound until recently). Well - there was a housing bubble and it has crashed. As a result, total investment has been weak for some time now. --- Perhaps due to unemployment and lax lending practices encouraged from what party?
E = net exports. The US runs a mammoth trade deficit, so this ones out as well. --- Perhaps again due to the outsourcing plague with a dash of currency manipulation?
That leaves G -- as in government spending -- to pull us out of this mess. Unless of course you like depressions you dolts. --- I don't believe anyone likes recessions/depressions and I'd be willing to believe all would come together in agreement if there was enough confidence in it's success.
This existing recession is not going to be magically shortened with a "new" new deal. Perhaps this storm is needed to clear the air meaning we in whole cannot sustain near the levels of spending.
I don't think it's a democratic or neo-con thing anymore IMO. I selected "red" in 2000 for smaller government and not in 2004 because "red" did the opposite. Globalization has changed the traditional game plan and unfortunately I don't believe the leader of the free world, the great USA entered into it well. Too few have made too much off the lives of others however once we cede our option to decide we almost always lose it forever. It's time to regroup, bring manufacturing inducing R&D back and buckle down on some fiscal discipline.
Have a $50k salary job and drive a $57k Cadillac? You need some fiscal discipline.
Have a $100 monthly personal cell bill and make $30k a year? You need some fiscal discipline.
If have been out on your own for a few years and your livelihood is still dependent on your next paycheck you are overextended. You need some fiscal discipline.
"Some" of us are spoiled to some extent in various ways and until we get our houses in order, we cannot help our neighbors.
Not to negate taking on a loan to rebuild our house, if it will not rebuild with a long term scope then there's little point in taking the loan.
Posted by: B_Real | February 2, 2009 6:45 PM
Republicans are seeing this as a wager for 2010/2012, and are feeling pretty clever. And why wouldn't they? If the stimulus is a success, Obama is going to get the credit, regardless of how many Republicans voted for or against it. If the stimulus fails, they can try and pin the blame on Obama and take him out in 2012 or make big gains in 2010.
On the surface this looks like a safe play for Republicans. Oppose the legislation, make a stink and get as many concessions as they can, but not totally derail it, and instead let Dems own this legislation.
Where this becomes idiotic gambling is the fact that Republicans are making a bet not only against Obama, but against America in general. Regardless of the failure or success of the stimulus package (I don't think its a very good bill; not enough infrastructure spending, too much omnibus Republican tax cut spending) the American economy is going to recover, it always has, and usually in short order.
Betting against the American economy is a sucker bet, and its one that Republicans have made in a big way.
Posted by: azzzdave | February 2, 2009 6:58 PM
hmmmm, here is a great idea. Legalize marijuana and tax it, but OH NO thats right marijuana is BAD!!!!!!!!. Thats why alcohol is legal and killing people daily. And thats why cigarettes are legal and killing people every day. Ah yes but who am i to say im just a citizen of this country.
FYI
Legalization and taxation of marijuana in all 50 states would generate over 50 Billion a year in tax revenue
Posted by: Adam | February 2, 2009 7:02 PM
This existing recession is not going to be magically shortened with a "new" new deal. Perhaps this storm is needed to clear the air meaning we in whole cannot sustain near the levels of spending.
Posted by: B_Real | February 2, 2009 6:45 PM
I wouldn't expect anything less from a trickledown, tax cuts for the rich solves all of our problems Rethug like you.
The American people just got finished tossing you nuts to the curb for a very good reason, your idea's and ideology FAILED in a spectacular manner.
Posted by: U_B_Real | February 2, 2009 7:05 PM
In fact, the source you cite as supposed "proof" quotes Limbaugh chiding Republicans for hoping the Obama administration succeeds. Grow a brain.
Posted by: MJ | February 2, 2009 6:15 PM
Funny.....It seems as the new head of the RNC feels different.........and I quote:
"Rush Limbaugh is a conservative voice in this country that clearly people must pay attention to and clearly the Obama administration and others in the administration must be paying attention to". All hail Rush....new voice of the RNC.
Posted by: bill r. | February 2, 2009 7:13 PM
Rush Limbaugh is a Talk Radio jock whose shtick is to annoy people. He's not the "leader of the House Republicans". In fact, the source you cite as supposed "proof" quotes Limbaugh chiding Republicans for hoping the Obama administration succeeds. Grow a brain.
Posted by: MJ | February 2, 2009 6:15 PM
Really? I could have sworn that I heard a House Republican got down on his knee's and begged for forgiveness from fatso Rush last week. Maybe you missed that, Mr Big Brain:
http://themoderatevoice.com/26041/gop-lawmaker-apologizes-to-republican-powerhouse-limbaugh-for-criticism/
Posted by: ajsalcny | February 2, 2009 7:15 PM
Frank James is a little off here:
1. His description of how history books assess the effectiveness of the New Deal is simply wrong.
2. He is telling us half the story of why the economy failed to recover during the New Deal and leaving out the other half.
As a teacher of Advanced Placement U.S. History, I can tell you that texts do not credit the New Deal with stimulating a full recovery. (At least recent ones; maybe F.J. is looking at outdated books(?))
New Deal programs did alleviate unemployment signficantly, and they did offer relief to people who were hungry.
However, as any historian worth his/her salt will tell you, FDR never gave up his aversion to budget deficits. His attempt to cut deficits in 1937 by pulling back on WPA and other programs sent the economy back into a recession:
"Federal contributions to consumer purchasing power fell from $4.1 billion in 1936 to less than $1 billion in 1937." (Robert Divine, T.H. Breen, et al. America Past & Present)
As any (recent) history book will tell you, it took the massive spending of WWII to bring about true recovery.
WWII increased spending from $9 billion in 1940 to $98 billion in 1944. And--and this is KEY--that spending was distributed evenly throughout society. Labor unions were doing pretty well, excess corporate profits were taxed heavily, and workers were bringing home lots of overtime pay.
WWII, introduced truly big government bureaucracy AND truly big deficits, at a scale that FDR was hesitant to introduce in the New Deal.
F.J. needs to reconsider from whom he takes his history lessons.
Posted by: J. Slosar | February 2, 2009 7:20 PM
Public works projects make sense. Really, despite what pugs say, the facts support this.
Right now, the governement is hemoraging money on unemployment insurance. I believe this is one factor dragging the states' budets down.
So, right now, the government is paying the workers to sit and do nothing. If the governement kicked in just a little more, then the workers could actually produce things for this government and make a livable wage.
So, anyone opposing worker programs have not thought enought about the subject.
Posted by: Xcellentform | February 2, 2009 7:24 PM
"Expect some ...spending...to be removed Expect MORE infrastructure spending... [and] some help for homeowners to be inserted as well. Expect more emphasis to be on creating JOBS JOBS JOBS."
Posted by: Lars Greko | February 2, 2009 6:12 PM
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I certainly hope so. That's what I meant by "creative spending". It remains to be seen if that's what we get. BTW, I never liked Herbert Hoover much.
Posted by: MJ | February 2, 2009 7:35 PM
Um, Worst Nightmare, you said, "That leaves G -- as in government spending -- to pull us out of this mess. Unless of course you like depressions you dolts."
You make the unrealistic assumption that you can simply pump up G and not change anything else. By running massive deficits, as called for, you're raising the interest rate due to the crowding out effect. This, in turn, makes it harder for the private sector to invest and grow.
But that you for a snide comment that would embarrass an Econ-101 student.
Posted by: Craig | February 2, 2009 8:10 PM
This "recovery" plan of Obama is nothing but a specious, socialist Trojan-horse. To quote Rahm Emanuel: "no great crisis should be wasted"
Posted by: Reaganite Republican | February 2, 2009 6:16 PM
.........
"Reganite Republican"? You mean the godfather of the tax cuts for the rich/ failed trickledown theory mumbo jumbo nonsense?
HAHAHA!!! Wow, the Repubs are so delusional, I suspect they're going to be out of power for even longer than I thought in the first place.
Note to republican whiners and "very serious" concern trolls who are just now taking issue with spending, the economy, detainees that we haven’t been able to get enough evidence in seven years to charge with a crime or whatever other whiny crap that was in large part caused by the very same republican policies that you cheered for, pushed for or voted for:
Your way failed. Big time. Like "F-" failed. Of epic proportions. The tax cuts failed. The neverending sinkhole of money for Iraq failed. Torture failed. Indefinite detention of "enemy combatants" failed – even shot down by a Supreme Court where 7 of the 9 Justices were republican appointees. Big money handouts to the oil companies failed. Big money handouts to the financial institutions failed. Deregulation failed. Ignoring the infrastructure failed (bridge in Minnesota or Hurricane Katrina, anyone).
And because of it, you lost. Badly. Twice in a row.
So guess what? You don’t get to call the shots anymore. You don’t get to suddenly decry spending – when it is going to infrastructure, energy policies and the middle class. You don’t get to perpetuate the approval of torture. You don’t get to bury evidence, to allow subpoenas to be ignored, or to dictate who gets tax cuts. And you don’t get to tell the Attorney General how to run the Justice Department, the Secretary of State how to run the State Department and most certainly the President how to set this country’s policy.
Not after the butt kicking you took in 2006 and even more so back in November.
It doesn’t matter if you throw out "scary concerns" about Barney Frank, Chris Dodd or Nancy Pelosi setting the agenda or being in charge. It doesn’t matter if you ask where the detainees will go if Gitmo is closed, especially since you don’t have another alternative. You don’t get to ram a social policy that is straight out of the 16th century down the throats of Americans.
You had control of every single branch of Government – and a good amount on the state level as well. And you were able to do exactly what you wanted. And if the country finally realized that the crap that you peddled was worthless, useless, a distraction and sent this country to the brink of disaster, then that isn’t Pelosi’s fault or Frank’s fault or Clinton’s fault etc etc blah blah blah.
You had your chance, and blew it. Big time. And because of it, you got smacked down. Hard. End of story.
So stop whining. Stop lying. Stop with the strawmen and the ad hominem attacks. That era is tired, and frankly is inching closer and closer to being over. Obama knows it. More and more Americans know it. And more are realizing it every passing day as they see what a responsible, engaged and smart administration can do – and the reaction that they are getting around the country and world.
Wake up and realize it, or continue to make an even bigger mockery of yourselves than you already are. Which, frankly, is fine by me, since that will marginalize you even further as this country slowly gets back on its feet.
Posted by: clammyc | February 2, 2009 8:15 PM
You make the unrealistic assumption that you can simply pump up G and not change anything else. By running massive deficits, as called for, you're raising the interest rate due to the crowding out effect. This, in turn, makes it harder for the private sector to invest and grow.But that you for a snide comment that would embarrass an Econ-101 student.
Posted by: Craig | February 2, 2009 8:10 PM
I've yet to hear any good idea's from Repugs like you Craigy. You're out of power because trickledown was exposed as a failure and that's why you're left standing on the sidelines screaming about spending now.
Posted by: your worst nightmare | February 2, 2009 8:22 PM
Posted by: ajsalcny | February 2, 2009 7:15 PM
.
Mr No Brain,
So please tell me when the "leader of the House Republicans" said he wanted Obama to fail. I'm still waiting...
Posted by: MJ | February 2, 2009 9:05 PM
To bill r. @ February 2, 2009 6:21 PM:
You asked about Obama's tax hikes.
Obama is going to fight the renewal of Bush's tax RATE cuts.
This means that people's taxes will go UP. When taxes go up, it's called a tax hike.
Regardless of any spin, in the tim eof a deep recession, Obama is going to raise taxes on the very people who will help us get out of this.
It will be one of the worst and biggest mistakes he makes and I am sure there will be many.
Posted by: Alz | February 2, 2009 11:48 PM
Posted by: ajsalcny | February 2, 2009 7:15 PM
.
Mr No Brain,
So please tell me when the "leader of the House Republicans" said he wanted Obama to fail. I'm still waiting...
Posted by: MJ | February 2, 2009 9:05 PM
....
ajsalcny,
Don't answer MJ. He's a "concern troll". He wants to control the board because he has a giant ego/severe inferiority complex and the only way he can do this is to keep asking stupid questions of people who have already handed him his butt on a platter.
.
http://www.urbandictionary.com/define.php?term=concern+troll
Posted by: MJ = self proclaimed smart guy | February 3, 2009 12:00 AM
What on earth is this junk?
Why not just quote the thoroughly unqualified Amity Shlaes (no, she graduated with a degree in english literature), whose arguments have been swiftly deconstructed by Paul Krugman time and again, as some kind of super-independent authority on FDRs policies during the Great Depression?
Where are the plethora of strong counter-arguments in this article?
All James serves to do is give credibility to a politically motivated, often intellectually dishonest attempt to smear FDRs New Deal program.
By the way, tell me, who claimed that the New Deal "end[ed] the Great Depression."? The largest public works program in human history, the Second World War managed that.
Maybe "It seems like everywhere you turn" if, by everywhere, you mean the WSJ editorial page. I really don't understand why the WaPo persist on giving Shlaes' hack writing credibility.
What a monumental waste of cyberspace.
Posted by: Chris | February 3, 2009 7:39 AM
So we have a journalist, on the political beat, spouting economic theory, citing economic theory spouted by a journalist with a background in English Lit.
You should probably stick with D.C. dinner parties and the first family's dog search, Mr. James.
Posted by: A Cynic | February 3, 2009 10:24 AM
The fact is, the "Great Depression" hit every western economy--the US, Canada, France, Britain, Australia among others. Only the US tried a "New Deal", while the rest tried orthodox spending cuts. The US was the last of these countries to recover.
Posted by: Inconvenient Truther | February 3, 2009 10:40 AM
"He wants to control the board because he has a giant ego/severe inferiority complex..."
Posted by: MJ = self proclaimed smart guy | February 3, 2009 12:00 AM
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John E,
I want to control the board? By posting 3 or 4 times per day? Whatever.
.
Once again, I've never proclaimed myself smart, and I admit that many people are smarter than I am... except for you. EVERYBODY is smarter than you are, and you have never handed me my butt.
.
As for what is stupid here, it is not my question but rather this statement: "The Leader of the House Republicans wants Obama to fail." (FYI, blubber head his name is John Boehner; maybe you've heard it.) When has he ever stated that he wants Obama to fail? Still waiting...
Posted by: MJ | February 3, 2009 12:47 PM