Who do I thank for all the free money?Follow

Which would be a great reason for you to have read all the words I wrote and noticed the word "direct" in there. Otherwise, according to your own logic, we could blame our current economic state on anything we want that has happened over the last 25 years. But that's kinda useless, isn't it? By "direct", I mean the direct effect of the sudden loss of value of the mortgage backed securities in the investment market (and specifically the financial portion of that market).

We're not currently dealing with banks struggling because they hold too much of those devalued assets and can no longer borrow or lend money as a result, are we? Thus, the "direct economic effects" from 2008 have long since passed. This is certainly the case in the US, where banks are back to making record profits, the market just hit 13000 again, and by all normal indicators should be firing away and growing like gangbusters.

What we're not seeing in the US is employment and GDP growth coming back. The actual financial industry has been pretty much recovered for the last year and a half. We should have seen an accompanying recovery in jobs and production, but that has been slowed. IMO, it's been slowed because of the recovery act. Between the cost of the act itself (and others), and the various regulations and mandates within those laws, the combined effect has been to discourage job creation in the private sector.


And that's exactly the area we have not recovered in. Now, I'm sure that other countries are having other problems, but I'm only speaking directly about the US and discussing the effect of the stimulus spending on our recovery (or lack thereof). I fully acknowledge that other countries, who already have out of control social spending and the boat anchor that places on their own economic growth and recovery, will also tend to have sluggish recovery. But that's their norm. It's not the norm for the US.

Hey get in line, Im still waiting for a cite to government spending causing an economic impact on par with the numbers caused by Private Investments leading up to 2008.

For one thing, US banks are still struggling madly with the fact that Financial Banks will in most cases no longer loan money to each other, or to Retail banks, nor will Retail Banks loan money to each other. So even when banks want to lend money out to US individuals or businesses, or the government, they often don't have any money to do so, as US savings in banks is outweighed by borrowings.

Secondly, the economic fallout of massively devalued assets (financial, property, and share market all of which are tightly tied together) is going to take decades to wash through the system. This wasn't a normal recession. This was a global financial meltdown second only in severity to The Great Depression, and if you think your trading and tourism partners' woes don't affect you you're dreaming.

Did you know that we could have Faster than Light travel if the rules of causality didn't exist?

He can cite Karl Rove who said pretty much the exact same thing earlier this month.

Yes. That was TARP, and it was necessary to turn around the problems with the financial industry.

I'm talking about all the stimulus and recovery related laws passed *after* TARP. Those had nothing to do with plugging the leak (so to say). They were sold on the argument that they were needed to help us recover. But at the very least, we should accept that they didn't work so well *and* they racked up a sizable debt.



I could link to dozens of blogs and opeds. Do you really want me to do this?

Because then you wind up with mouthbreathing simplification of arguments to what makes you feel better like "Compare MRIs to Lasik and it proves government is evil!"

Certainly there's value in thinking about things yourself. There's also value in looking into the opinion of people who study complex issues on a regular (and professional) basis. You're really good with the simplification until it fits your agenda part and then crowing about how you thought it up all by yourself. A lot less good at admitting things could be more complicated than your simplistic "logic" or MRIs vs Lasik (or ACC or ESC research or SSM or any vaguely academic study).

And yet, shockingly, I've managed to get a car loan and refinance my home in the last couple years. Interest rates are at nearly record lows. While lending requirements have become a bit more strict, frankly they needed to be. Being too loose with lending is part of what got us in this mess (a really large part). I'm honestly curious why people keep assuming that "banks aren't lending". Of course they are.

The banks (at least in the US) were pretty much completely recovered within a year or so after TARP was passed. Most of the market recovered within 6 months to a year after that. From a financial sector standpoint, the US has been fully recovered for 1.5-2 years. The problem with our employment and GDP growth is a second problem unrelated to the financial sector. That should be readily apparent to anyone.

Given that "slow job creation" was exactly what conservatives said would happen if we spent so much on stimulus and recovery, and that is exactly what has happened, shouldn't we maybe put a bit of weight into their/my position on this?

Why insist that the recovery acts had nothing to do with our current problems? Can't you even imagine the possibility that a government program might actually result in a loss of economic growth rather than an increase? And if it's possible, then why assume that's not the case here? All the evidence points in that direction, doesn't it?



God no, it wont! I suppose some minor effects will linger through, mostly in housing values, but the idea that we're destined to suffer some massive negative economic effects for decades, so we should not be alarmed at the sluggish economy, the poor employment and GDP numbers, or the massive spending and resulting debt is frankly absurd. You've bought a line there.



What do you think that means? It was a bit larger than most, but what do you think makes it "not normal". If anything this recession was much easier to manage than most because the initial harm was limited to really one major part of the economy. It's a big part, but once fixed, everything should have recovered nicely. We "fixed" the problem with TARP. There was no need to do more than that.



Honestly? I think that nations who already had weak and tottering economies prior to the subprime mortgage crises are now using that as the scapegoat for much larger already-existing problems. They don't want to acknowledge that their problems might be the result of their own poorly thought out policies, so they blame the first thing that comes along instead. It's a crappy excuse. It's like running your credit cards to the max and living paycheck to paycheck for years while spiraling further into debt and then blaming the fact that you lost your job and it took you a few months to get another, which didn't pay quite as much for the fact that you're losing your house, car, etc.

Nope. That may have been a triggering event which tipped you over, but the underlying problems were there before. Most of Europe has been running high debt and double digit unemployment for a decade or more. This latest problem didn't cause that. And guess what? It didn't cause high debt and high unemployment in the US either. The adoption of European style social spending programs did.


Can't you see this pattern? It's right there in front of you. Just open your eyes.

Ok




No, I don't. But whenever I do, those who disagree with me will insist that the sources I cite aren't valid, apparently because they disagree with them. I've kinda adopted a "why bother" approach. Are you honestly doubting that many people believe that the recovery act caused more harm than good? So why assume that no one on the internet would be saying that?


Here's the thing: I'm saying it. Why is my opinion any less valid than some other random person on the internet?



And I can show that if I get a flat tire, my car will still continue to travel forwards. Thus, we can conclude that flat tires help make cars move forward.

Do you see where you went wrong?



Since all GDP growth is the result of some form of private investment (in the US at least), do you really want to go there? The economy is clearly much larger today than it was 10 years ago. Even at the worst point of our recession, it was still larger than 10 years prior (during the heyday of the Clinton administration). On net, private investment has a massively positive effect.

On net government spending has a negative effect. How can it not? It's "spending".

That link doesn't support your claim that ARRA cost the US jobs and GDP, all it supports is that the funds were not allocated efficiently (something I personally believe as well, but TARP wasn't all rainbows and sunshine in that regard either.)

Strike Two.

Please provide a link that supports your claim that ARRA cost americans 8 million jobs and 700billion from the GDP.

Perhaps you should write an editorial about it.

No. But being wrong about one part of something should make one suspect that they are wrong about other parts as well. Doubly so when the two parts are directly connected. I'm not sure how I can be more clear about this:

Obama's economic team was grossly wrong about what the economy would do in terms of employment. Not just a little bit off, but incredibly off. Yet despite this complete lack of ability to come even close to predicting what unemployment would do absent their stimulus bills, you accept their word completely when they tell you how many jobs those bills have "created or saved".


How can they possibly know this since it's clear they don't know what the baseline is? They can't. The reasonable response in this case is to ignore their claims about the effect of those stimulus bills. The completely irrational response is to assume that even though they thought that unemployment would not breach 8% if the bill(s) were passed, and they were completely wrong, that somehow they are right when they now tell you how much better off you are because they passed those bills.


Sorry, I don't buy it. And neither should you.

You really do suck at reading comprehension. That's not what is being said there. What it's saying is that the total count of jobs "created or saved" by the ARRA was 2 million in march of 2010. But by august of the same year all of those jobs had been lost. They even follow up with an explanation:




See where it says they created "temporary jobs"? That's your clue as to why all those jobs figures you're parroting aren't valid. What they were doing was hiring someone, then laying them off a few weeks or months later, then hiring someone else (could even be the same person), and laying them off a few weeks or months later. They count each of the hires as a job created, but don't count the people laid off.



Sigh... Try reading for comprehension. Seriously.