Eric Stoner
08-18-2011, 11:03 AM
Eric,
Here are the basic facts:
Government greatly increased spending in 1940.
Unemployment fell dramatically in 1940.
The economy grew dramatically in 1940.
It's obvious to anyone in the reality based world that the increase in government spending benefited the economy. Instead of acknowledging this you're going to nitpick everything to try to find a way to invalidate these facts because it's against your ideology. As I said before, for conservative ideologues, ideology takes precedence over facts and evidence. The results would have been exactly the same if government spent the same amount of money on something else, such as roads and bridges. You just do not want to acknowledge government spending can be good for the economy because it goes against your ideology.
Spending increased in 1940 because of two things : FDR and the Dems were running for re-election and W.W.II was underway. Spending increased relative to 1937 and 1938 when it had declined while at the same time FDR increased taxes and the Fed reduced the money supply. FDR's alphabet soup of agencies and programs did little to heal the economy in his first term. Even FDR's own Treasury Secretary, Henry Morgenthau admitted in 1939 that FDR's policies had FAILED. FDR himself whined in 1937 that "Capital has gone on strike." He was correct and it was HIS policies that caused it.
We have gone over this so many times that I have lost count. I don't know if you just lack the ability to retain anything or it is your ideology that blinds you to clear historical evidence. If, IF, FDR had focused on just infrastructure via the WPA and TVA we arguably would have emerged from the Depression sooner. If , IF, Obama's porkulus package was focused on infrastructure instead of saving the jobs of reliable Democrat voting government workers, we might be doing much better today. As opposed to transfer payments and inflated salaries and benefits for government employees, at least infrastructure spending has tangible corollary benefits and something resembling a genuine multiplier effect. One of several reasons for the Reagan recovery was vastly increased infrastructure spending financed by a nickel a gallon increase in the Federal gas tax.
The problem with increased government spending is that the money has to come from somewhere. Either Uncle Sam has to steal it ( excuse me, I mean tax somebody ) or it has to be borrowed. Money that is taxed can't be spent on anything else. Borrowed money has to be paid back. Preferably by money collected , in part, from taxes levied on people that are now employed after formerly being unemployed.
Government spending is like giving continual transfusions to a hemorrhaging patient rather than operate and repair the damaged artery. It keeps the patient alive but does nothing to solve the underlying problem and at some point the blood bank runs dry.
Even Austin Goolsbee has gottne religion and agrees with me. On Kudlow's program last night, he agreed that we ought to broaden the tax base by cutting rates and eliminate deductions and loopholes. He also agreed that the corporate rate ought to be reduced to encourage repatriation of overseas profits. The problem is that Obama will not let the employment crisis interfere with his Martha's Vineyard vacation and insists on making us wait three weeks for his job creation plan.
Here are the basic facts:
Government greatly increased spending in 1940.
Unemployment fell dramatically in 1940.
The economy grew dramatically in 1940.
It's obvious to anyone in the reality based world that the increase in government spending benefited the economy. Instead of acknowledging this you're going to nitpick everything to try to find a way to invalidate these facts because it's against your ideology. As I said before, for conservative ideologues, ideology takes precedence over facts and evidence. The results would have been exactly the same if government spent the same amount of money on something else, such as roads and bridges. You just do not want to acknowledge government spending can be good for the economy because it goes against your ideology.
Spending increased in 1940 because of two things : FDR and the Dems were running for re-election and W.W.II was underway. Spending increased relative to 1937 and 1938 when it had declined while at the same time FDR increased taxes and the Fed reduced the money supply. FDR's alphabet soup of agencies and programs did little to heal the economy in his first term. Even FDR's own Treasury Secretary, Henry Morgenthau admitted in 1939 that FDR's policies had FAILED. FDR himself whined in 1937 that "Capital has gone on strike." He was correct and it was HIS policies that caused it.
We have gone over this so many times that I have lost count. I don't know if you just lack the ability to retain anything or it is your ideology that blinds you to clear historical evidence. If, IF, FDR had focused on just infrastructure via the WPA and TVA we arguably would have emerged from the Depression sooner. If , IF, Obama's porkulus package was focused on infrastructure instead of saving the jobs of reliable Democrat voting government workers, we might be doing much better today. As opposed to transfer payments and inflated salaries and benefits for government employees, at least infrastructure spending has tangible corollary benefits and something resembling a genuine multiplier effect. One of several reasons for the Reagan recovery was vastly increased infrastructure spending financed by a nickel a gallon increase in the Federal gas tax.
The problem with increased government spending is that the money has to come from somewhere. Either Uncle Sam has to steal it ( excuse me, I mean tax somebody ) or it has to be borrowed. Money that is taxed can't be spent on anything else. Borrowed money has to be paid back. Preferably by money collected , in part, from taxes levied on people that are now employed after formerly being unemployed.
Government spending is like giving continual transfusions to a hemorrhaging patient rather than operate and repair the damaged artery. It keeps the patient alive but does nothing to solve the underlying problem and at some point the blood bank runs dry.
Even Austin Goolsbee has gottne religion and agrees with me. On Kudlow's program last night, he agreed that we ought to broaden the tax base by cutting rates and eliminate deductions and loopholes. He also agreed that the corporate rate ought to be reduced to encourage repatriation of overseas profits. The problem is that Obama will not let the employment crisis interfere with his Martha's Vineyard vacation and insists on making us wait three weeks for his job creation plan.