I couldn't sleep last night after hearing this news. School districts around the country are cutting teachers and instruction days and these numbskulls want to give new incentive to house flippers? Shameful and wildly disappointing.

I also had a hard time sleeping because of this news.

$100 bln gvnt spending increases GDP by $150 bln?
Great news! Let's spend $100 000 000 bln, we could solve hunger problem all over the world!

Based on news reports, the bank bailout is a bad deal too.

It's a bad deal because it relies on the government to stimulate the economy. Once government spending stops, guess what, the GDP drops again. This is what happened with FDR's new deal and is the reason why unemployment rose in 1938 to levels comparable when FDR took office. FDR effectively prolonged the depression with his new deal, only WWII brought us out of the depression. We are repeating history with this package. Apparently the Democrats only worry about getting reelected in 4 years rather the long term consequences of a very bad plan. I don't want to rely on another world war to get us out of this financial mess.

It's a bad deal because it relies on the government to stimulate the economy

Interesting.

FDR effectively prolonged the depression with his new deal, only WWII brought us out of the depression

So, what was it about WWII that brought us out of the depression? Could it have been, I don't know, all that government spending on said war?

This is what happened with FDR's new deal and is the reason why unemployment rose in 1938 to levels comparable when FDR took office

You numbers are off. Unemployment was not "comparable."

According to
http://www2.census.gov/prod2/statcomp/documents/CT1970p1-05.pdf

the unemployment in USA during the 30s was:

1931 16,3%
1932 24,1%
1933 25,2%
1934 22,0%
1935 20,3%
1936 17,0%
1937 14,3%
1938 19,1%
1939 17,2%

So yes, the unemployment _was_ comparable. FDR's New Deal has prolonged the depression.

JC... You're essentially explaining why Keynesian economic policy is successful...

... And then claim to be proving why it's a failure.

At this point, I have to ask for some kind of evidence that you aren't a complete fucking idiot.

JC,
It wasn't the new deal that caused the problem in 1938. Instead of continuing spending, they tried to balance the budget and reduced spending. The New Deal worked. we can't 'tax cut' our way out today. We can't drop interest rates any lower. People are not spending, so the Gov. must.

FDR prolonged the Depression in 1937 by raising tax rates. But that is something that somehow
is ignored.

sure if comparable means -6%
or 25% lower

Wait wait wait. That chart you used...the one with the unemployment numbers dropping between 1933 and 1937...

You know, the one you say prolonged the great depression?

Even though under FDR's First term he dropped the unemployment rate by 9.8%???

Lets also put up a chart for GDP growth during that time shall we?

When FDR took office: 58.7 Billion

1940: 101.4 Billion.

Ok so he Cut the unemployment by nearly 10%, almost DOUBLED our nations GDP...

Yet of course that PROLONGED the depression.

Idiot.

The economy thrived during WWII because of all the manufacturing that was required to support our allies. This is the same situation that occurred during WWI. The manufacturing export growth continued after the war since most of europe's manufacturing capability was reduced to ruble during the war. So no the new deal did not work, it made the economy reliant on the government for sustainability. The only true private sector growth during FDR's administration was due to the war. We are headed down the same path. Make the country dependent on the government. However, I don't see us spending $1 trillion every few years to keep the economy going so what happens when the spending stops?

One more time because you dont seem to follow this.

1933-1940 was um, BEFORE THE WAR.

He doubled the GDP BEFORE THE WAR.

He cut unemployment by nearly 10% BEFORE THE WAR.

What part of this is hard to understand?

Was the New Deal Perfect? Of course not. Did it work? Yes, yes it did.

You are the one who doesn't seem to be following me. FDR used deficit spending (Keynesian 101) to stimulate the economy and yes the GDP increased and yes unemployment went down. However, when FDR tried to stop deficit spending the economy went back into the tank. The reason: there was little private sector growth during this time.

The non partisan Congressional Budget Office has reviewed the current stimulus and they report that the net effect is negative compared to doing nothing at all. This is a bad bill because it relies on government spending which is not sustainable.

http://www.washingtontimes.com/news/2009/feb/04/cbo-obama-stimulus-harmful-over-long-haul/

Well, technically speaking, yes, he did cut unemployment. He kept it however just under 20%. It was disastrously high during his first two terms. On average it was 18-19% during "peace terms" of FDR. I don't think any other POTUS had so lousy record with economy.

Of course even FDR couldn't keep it so high much longer. The recovery came later than it would have without the New Deal, but you can damage the economy only for some time, after that it will always recover.

The CBO also reports that during 2009-11 the bill will 'cut unemployment and raise the GDP'. Yes long term it is very hard to sustain.

But if done right, the investments in the current stimulus package will have a net plus for the overall economy when it is finished.

Just like the Public Works Programs of FDR and the new deal gave us the economic infrastructure to propel us to decades of Economic Growth, this bill can do that as well by focusing on Education, Health Care, Energy efficiency products, public works, and other such things.

As to their being 'little private growth', again, NOT TRUE.

In the last half of the 1930's, the average gross private investment per year was up to around 10 BILLION dollars. In those days that was a lot of money.

In addition, the private Manufacturing sector GREW from 7 million jobs to 11 million jobs between 1932 and 1940...a HUGE increase.

Facts do not support you at all. Not even a little bit.

neo-Keynesians (Obots) believe that government stimulation in any and all forms will stimulate the economy. They have no clue what Keynes was all about. Keynes advocated deficit spending in economic hard times coupled with decreasing interest rates to Induce private investment, which would in turn produce jobs and increase cash flow.
Keynes advocated infrastructure investment and defense spending not social welfare. Social welfare was tried in Japan it failed. Social Welfare was tried in Europe. They are on the verge of collapse. When will you neo-Keynesians wake up.
The CBO predicts we will do exactly what happened in the 30's. We will see some growth in the short term, but once the debt reaches a critical mass, it will crowd out private investment. Meaning people will not spend money of save money. This is what lead to the 39 recession. It was only the increase in military spending and private growth that the military industrial complex provided that got the US out of the Depression.
Jack Kennedy gave tax cuts and ended his recession.
Reagan gave tax cuts and ended his recession.
Clinton gave tax cuts and ended his recession.
Bush gave tax cuts and ended the post 9/11 recession.
Of course the evidence doesn't fit the Obot's world view so they immediately discard it.

Also, the unemployment statistics you use are misleading. They don't count workers employed by the WPA.

That brings the unemployment rate down significantly by 1940 to 9.5 percent.

Also, Exports rose from 1.67 billion in 1933 to 4.02 billion in 1940...almost 3 times as much.

Let me repeat, so its clear. EVERY SINGLE PIECE OF MEASURABLE DATA shows that FDR's New Deal improved the economy.

Every. Single. Piece. of. Measurable. Data.

To Zombiehero:

What are you talking about Tax Cuts ending recessions? What world do you live in?

Clinton RAISED taxes, in case you forgot. When he DID cut taxes in 1997, it led to a recession in late 1999 early 2000.

Reagan cut taxes, and doubled the national debt. By the late 80's early 90's guess what? RECESSION.

Tax cuts also have led us to HUGE budget deficits. You think 1 trillion dollars is alot of money for a bill?

Bushes Tax Cuts cost us 3 times that much!!! Thats right...3 TRILLION DOLLARS is the total cost of the Bush Tax Cuts.

3. Trillion. Dollars.

But please, continue to ignore all pieces of empirical evidence.

You want a story of a successfull POTUS? I'll tell you a story.

1919 - 1.4%
1920 - 5.2%
1921 - 11.7%
1922 - 6.7%
1923 - 2.2%

How Harding cut unemployment by 9.5% (or above 80% of initial value)? By not making any kind of a new deal. By cutting taxes and public spending. And it worked like a miracle!

In 30s - Hoover and Roosevelt have tried another way - and it didn't work so well.

Now GWB and BO are trying to repeat HH/FDR experiment. Americans, I wish you best luck. You will need it.

In 30s - Hoover and Roosevelt have tried another way - and it didn't work so well.

Damned Socialists...

Howard, you seem to be stuck on a single track and can't get off. I have said the New Deal did improve the economy, as long as the government was spending money. In 1937 when FDR tried to reduce his massive spending the economy tanked again. The New Deal had suppressed private sector growth, how many times do I have to say that? FDR's response to the sudden decline in the economy? Well spend more money of course to the tune of $5 billion in 1938. FDR was in a vicious cycle of government spending that he could not stop. It is a good thing the war stopped his misery. The entire US economy was dependent on government spending during FDR's first two terms and hence FDR prolonged the Great Depression because the economy could not grow beyond the stimulus provided by government spending.

So to reiterate to make sure you get it. The current stimulus package will result in short term growth, that is what $1 trillion of government spending will get you. However, when the government stops spending, ala FDR 1937, then the economy tanks again. So is our response going to be another $1 trillion stimulus aid package 2 or 3 years from now?

You do know that Harding's Policies, far more than Hoovers, are what led us to the Great Depression in the first place. In fact, I would compare Harding more to GWB then Hoover, simply as it was businesses gaining near unlimited, unregulated, monopoly status that was unsustainable that led to the crash.

Harding's policies were short term wonders, but utterly devastating and worse than doing nothing overall.

Hoovers crime was doing little to nothing to stop the depression, and merely Continuing Harding's plan and policies.

JC again: There is NO EVIDENCE that the New Deal stifled Private Sector Growth.

That is what I am trying to get across to you.

In fact, evidence suggests (as Ive partially given in my previous post) that the private sector was well on its way to healthy growth before the war.

Ironically, during the war many private sector manufacturing and other industries shifted to a war footing, hence becoming 'dependent' on the government for the products they sold.

I am challenging your basic concept, that the New Deal suppressed private sector growth.

1937: Government tries to balance budget and slow down spending. Recession starts (yes recession within a depressionn)
1938: Unemployment goes up, GDP goes down almost back to the levels seen at the height of the Great Depression in 1933.

By the way, a survey of economists reveals that 50% of them believe the New Deal prolonged the Great Depression. What is not disputed by anyone is that the Great Depression did not end until the start of WWII. So if the New Deal was so great why didn't we ever get out of the depression?

The survey you refer to shows 27% saying the New Deal prolonged the depression, 23% say Yes with provisos (the survey doesnt say what the provisos are unfortunately) while 51% disagree completely.

In an interesting note, the same survey was given to Historians, and 73% think that the New Deal HELPED.

As to not getting out of a depression: He did the best he could at the time he had. They call it a great depression because it was HUGE. The problems were manifold and massive...it took years (1929 to 1933) for us to slip into it fully.

He also did another thing back in 1937: He raised taxes. Across the board. Thats another contributing factor.

Howard, this has been an interesting discussion and you have made some good points. Unfortunately I have to break away. I don't think we are going to change anyone's mind anyway. We should all understand that there are two viewpoints to every issue and we should try to understand the opposing viewpoint whether we agree or not.

Howard, you are arguing with someone whose mind is made up. Quoting facts to such a person is pointless.

What this fight has illustrated is that the Republicans have no intent of acting in a bipartisan fashion. This bill has been so extensively compromised as to significantly dilute its' value as stimulus, and that got all of three Republican votes.

Dems need to start playing hardball. First step should be to seat Franken immediately. We need his vote.

Can Harry Reid lead? If not, he should step down from leadership.

Laborlawyer, you have forced me into one more post. The facts that Howard recites actually bolster my case not weakens it because we look at the facts from different angles. The last stat about the Historians supporting the New Deal versus the Economists doesn't surprise me. Without knocking anyone, the less you know about economics the more likely you will see the New Deal as successful. As for acting in a Bipartisan manner, I think it is the Democrats who are suppressing any opposing views on the stimulus package rather than the Republicans. Like I said every issues has an opposing viewpoints and all viewpoints deserved to be heard.

I agree. No one has a monopoly on whats right. A pleasure debating :)

The president and the Dem social engineers on the Hill are getting just about exactly what they have been scheming for and demanding in this deal. But it’s an absurd and shameful and wasteful boondoggle that won’t do nearly enough to create jobs directly or let the private sector create jobs. This monster’s going to fail miserably, perhaps a bit less miserably than the original version cooked up by Pelosi’s apparachiks, but it will fail. The Dems own this bill and the whole world knows it. Barky has bet his presidency on this and he has already lost. He and congress will be scrambling like hell later this year to fix the crisis, which will deepen and deepen. They’ll fail then too, and all of us will suffer for it and suffer and suffer. He and Pelosi and the rest of the crew will need to take responsibility for their failure.

1993 Bill Clinton propposed a $19.5 billion dollar stimulus for what was the worst recession since the Great Depression (What did Obama say about same old politics? Oh forgot he doesn't believe that anyway) The plan was cut $4 billion by the GOP. Hey guess what happened? Remember how all you Obots love to say Clinton ear was the best ever...wasn't because of Clinton, it was because of the GOP opposition. Congress has to pass appropriations. The White House can only sign them. The prosperous 90's, the Democrats like to talk about were the result of GOP fiscal policy.

GWB spent like a Democrat. That's why there is a huge deficit.

So answer me this...if we got into this recession by spending, how on earth are we going to get out by spending even more money that we don't have?

The Current Stimulus fails to do anything about what got us into this mess in the beginning. The Housing Bubble and indebtedness as a whole.

Please explain how the Stimulus bill will spur private investment, when Obama still plans to tax the crap out of capital gains?

The bottom up approach failed in the Carter years...so what about those failed policies of the past?

Even Democrats see this Stimulus Bill as a huge failure..

"Every penny of the $825 billion is borrowed against the future of our kids and grandkids, and so the question is: What benefit are we providing them? What are we doing for the country? It's the difference between real investment that will serve the nation for 30, 50 years and tax cuts, and that's a very poor tradeoff," said Rep. Peter A. DeFazio (D-Ore.). "I go to my district and people say, 'Yeah, I can use 10 extra bucks a week, but I would rather see more substantial investment.' We've gone through a couple bubbles that were borrowing and consumer-driven. We want a recovery that's solid and based in investment and productivity, and that points us at building things that will serve us decades to come."

"Such a long-term investment program should not be put together hastily and lumped in with the anti-recession package. The elements of the investment program must be carefully planned and will not create many jobs right away," said Rivlin, a fellow at the Brookings Institution. The risk, she said, is that "money will be wasted because the investment elements were not carefully crafted."

Face it, the Stimulus Bill stinks.

I doubt he's even had his mind made up, labor lawyer.

It's more likely that you're arguing with a paid shill. Normal people would have stopped bothering at this point and run away to another thread.

TO THE COTS

I've already noted that, in my opinion, the stimulus bill should have been written by the crack economics team in the White House and then forced through Congress. Now we have the House bill with too many easy targets for Republicans to attack and a compromise in the Senate that has let the Republicans water down the bill at the expense of the economic recovery.

Examples: cut in aid to states, a fast track economic help; too much in tax cuts, a weak economic help. And the total sum, already too small, has been reduced.

With Obama's bully pulpit eloquence, and with more spine in Congress, we should force the Republicans to demonstrate their intransigence and disregard for our economic distress. Vote for the best damn bill possible and make the Republicans do an actual filibuster.

homer www.altara.blogspot.com

Soullite, you may be right. I note this thread is heavy with right-wing trolls. zombiehero doesn't even realize that DeFazio is criticizing the Republican changes to the bill! Or that it was Clinton's 1993 budget bill- the one Republicans hated- that paved the way for the prosperity of the late '90's.

As for "suppressing" Republican ideas: get real, JC. Your side ran on these tired ideas and got creamed. Elections have consequences, my friend. Obama has gone out of his way to reach out to the folks he defeated and gotten slammed for the effort. Look at your fellow conservative in this thread calling him "Barky"; that's about the level of constructive debate we can expect from a generation raised on talk radio.

And btw I'm also not surprised at the split amongst economists. Our business schools are steeped in Milton Friedman acolytes. I'm surprised the number of them supporting FDR is as high as it is.

GWB spent like a Democrat. That's why there is a huge deficit.

Deficit went up under Reagan. Deficit went up under Bush I.
Deficit went down under Clinton. Deficit went up under Bush II.