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yet more post-election consequences - huge increase in government jobs
Obama proposes specifics in regard to public sector employment driven 'stimulus package'
The proposed "stimulus package" to dramatically boost employment has been tried before — and failed.
(snip)President-elect Obama has announced that he wants a big “stimulus” package to create 2.5 million jobs by 2011. Many of the details are unclear, including how much new government spending he will propose and how he is measuring job creation. Press reports suggest the incoming administration is looking at $400 billion-$500 billion over the next two years, but the Washington Post reports that Democrats are talking about as much as $700 billion during that time period.
Not surprisingly, the prospect of all this new spending (above and beyond the record spending increases during the past eight years) has triggered a feeding frenzy among special interests. Home builders, auto companies, road builders, state and local governments, the education establishment, the food stamp lobby, the green lobby, and alternative energy companies are among the groups fighting for a place at the public trough.
It would be easy to dismiss this orgy of new spending as the spoils of war. The Democrats won the election, after all, and now they intend to reward the various special interests that supported them. But that’s not a complete explanation. Some supporters of this new spending seem genuinely convinced that the federal government can create jobs."(snip)
(snip)"Unfortunately, no matter how the issue is analyzed, there is virtually no support for the notion that government spending creates jobs. Indeed, the more relevant consideration is the degree to which bigger government destroys jobs. Both the theoretical and empirical evidence argues against the notion that big government boosts job creation. Theory and evidence lead to three unavoidable conclusions:
The theory of government-instigated job creation overlooks the loss of resources available to the productive sector of the economy. Frederic Bastiat, the great French economist (yes, there were admirable French economists, albeit all of them lived in the 1800s), is well known for many reasons, including his explanation of the “seen” and the “unseen.” If the government decides to build a “Bridge to Nowhere,” it is very easy to see the workers who are employed on that project. This is the “seen.” But what is less obvious is that the resources to build that bridge are taken from the private sector and thus are no longer available for other uses. This is the “unseen.”
So-called stimulus packages have little bang for the buck. Even if one assumes that money floats down from Heaven and we don’t have to worry about the “unseen,” government is never an efficient way to achieve an objective. Based on the amount of money that is being discussed and the claims of how many jobs will be created, Harvard Professor Greg Mankiw filled in the blanks and calculated that each new job (assuming they actually materialize) will cost $280,000. But since money doesn’t come from Heaven, this calculation is only a partial measure of cost. In reality, the cost of each government job should reflect how that $280,000 would have been spent more productively in the private sector.
Government workers are grossly overpaid. There are several reasons why it costs so much for the government to “create” a job, including the inherent inefficiency of the public sector. But the dominant factor is probably the excessive compensation packages for bureaucrats. According to Bureau of Economic Analysis data, the average employee for the federal government now earns gets paid nearly twice as much as workers in the productive sector of the economy.
Notwithstanding these points, it is quite likely that politicians in Washington will pass a boondoggle-filled “stimulus” bill. While there may be a few naïve folks who think a big increase in the burden of government somehow is a recipe for job creation, politicians have a self-interested motive to move in that direction because it increases their power and influence.
They win and taxpayers lose."(snip)
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Re: yet more post-election consequences - huge increase in government jobs
At least the illegals will have jobs I guess.
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Re: yet more post-election consequences - huge increase in government jobs
Putting as many people to work as possible seems like as good an idea as I've heard. I mean, it may not be ideal, but in view of what has been happening I doubt it's the worst plan.
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Re: yet more post-election consequences - huge increase in government jobs
And the recession drags on.
And on.
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Re: yet more post-election consequences - huge increase in government jobs
The idea of "more jobs" has such a sweet sound to it. At least until you think about who pays for them. Long term, we all (and our kids) will be repaying this bill for decades to come. And where does the money come from in the short term? Borrowing from our overstressed financial institutions? Taxes? Foreign investors?
As nice as it can be to dream of public works employing the unemployed, there will be a huge price to be paid.
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Re: yet more post-election consequences - huge increase in government jobs
Quote:
Putting as many people to work as possible seems like as good an idea as I've heard. I mean, it may not be ideal, but in view of what has been happening I doubt it's the worst plan
Hockey Bobby, be careful what you wish for. Here's a relevant side effect to consider. Up until a few months ago, before the US dollar again strengthened, the US and Canadian dollars were basically equal in exchange rate value. This resulted in lots of Canadians crossing the border to seek 'bargains' in American stores, but also resulted in lots of Canadian jobs being lost ( mostly American owned companies with Canadian divisions finding that their effective cost of Canadian labor had risen significantly, and Canadian exporters to American markets who found that their effective cost of Canadian products had risen significantly).
Thanks to the Wall Street meltdown and 'foreign investor' payoffs on CDO's, the US dollar has now strengthened to the point where it is once again trading at CDN1.25 = USD1.00 ... which effectively lowered both the cost of Canadian labor and the cost of Canadian export products to American companies / buyers. Thus the rash of Canadian plant closures and the rash of Canadian job losses was slowed. This sort of exchange rate has historically existed for several decades.
But now consider what happens if the US gov't simply prints up and spends an extra 1 trillion dollars as Obama proposes without actually increasing US taxes to cover the cost. In all likelihood, the US dollar and Canadian dollar will again be on equal 1:1 footing. This will immediately make the cost of all Canadian labor more expensive than US labor, and will make the cost of all Canadian products more expensive than US products from the perspective of US Companies / customers ... because on the Canadian side of the border there are higher taxes embedded in the net cost of everything.
If the US dollar is devalued permanently as a result of money printing, you can probably count on the fact that every new public sector job that is added in America will result in a private sector job being lost in Canada (that formerly served the US export market, or a Canadian division of a US company like GM or Chrysler) ... in addition to the private sector jobs that will still be lost in America !
For Americans, the US dollar being devalued permanently will also mean an immediate and permanent price increase in all world market goods ... from gasoline to food to both domestically produced and imported manufactured goods. For American 'savers', the US dollar being devalued permanently will also mean that perhaps 25% of the 'purchasing power' of their US dollar denominated savings and investments will vanish.
Now for the 'dirty little secret' stuff. If the US dollar is permenently devalued by 25%, without pay raises this essentially means that the US standard of living will also be reduced by 20% because X amount of dollars will only buy 80% as many real goods. Of course this won't be a problem for union and government workers whose contracts include a COLA !!! But even for those Americans who are lucky enough to receive pay raises that offset the US dollar's loss of 'purchasing power', they still won't keep up. The reason of course is that US tax brackets will not be readjusted to compensate. Thus an American who is currently earning say $50,000 and paying a 10% effective tax rate might indeed receive a pay raise to $60,000 ... but will then face a 20% effective tax rate on the additional earnings !!!
Another 'dirty little secret' though is that a permanent devaluation of the US dollar will solidly screw the foreign investors that are currently holding huge amounts of US debt (like China and Japan and Euroland who own trillions of dollars worth of US treasuries and private sector bonds) out of 25% of their value ... at least in terms of the investors' home currencies. This will undoubtedly sour the mood of foreign investors in regard to making additional loans / investments to America ... probably resulting in a demand for extremely high interest rates (in this example 20%) being paid by the US gov't to cover future risk of additional US dollar versus 'home currency' devaluation. Of course, establishing a 20% interest rate at the US Treasury bond level will trickle through America's entire financial system ... i.e. 23% mortgage interest rates, 25% car loan interest rates, 30% credit card interest rates ... with obvious effects on future levels of economic activity !
The 'tin foil hat' crowd would advise anyone with a serious interest to research 'StagFlation'
(snip)"Bill Bonner explains stagflation:
"The Keynesian economics practiced by governments and central bankers depends on deception. As more money and credit is introduced into the economy - as "stimulus" - it is mistaken for real wealth. Consumers think they have more money to spend; businessmen think they have more customers; investors think they see more profits. Deceived, they happily expand the economy. As time goes on, however, prices catch up to the funny money and the consumer wakes up to the fact that he or she is no better off than before. So, gradually, the old trick stops working. Money and credit may pour in, but no one is fooled. Instead, prices rise, while the economy goes limp." (8)
“When the baby boom generation starts retiring, that will bring a tsunami of government spending that we are not prepared for. We are in a $53 trillion hole. And that hole gets deeper $2-3 trillion a year automatically, even if you have a balanced budget,” said former U.S. Comptroller General David Walker, featured in I.O.U.S.A. to WSJ. (9)
"I believe I.O.U.S.A. should be required viewing for anyone over the age of twelve. The film presents the TRUTH about the catastrophic state of our economy and the federal government's debts, which now total more than $50 TRILLION, that's $455,000 per U.S. household!" said Swiss America broker Candice Witherspoon who attended the film's debut in Phoenix, AZ. last Thursday night.
No wonder Americans feel like they are stuck in a rut, with real estate slumping, the stock market gyrating and inflation spiking near 10%, a 27-year high! "(snip)
~
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Re: yet more post-election consequences - huge increase in government jobs
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Originally Posted by
3-Legged Man
The idea of "more jobs" has such a sweet sound to it. At least until you think about who pays for them. Long term, we all (and our kids) will be repaying this bill for decades to come. And where does the money come from in the short term? Borrowing from our overstressed financial institutions? Taxes? Foreign investors?
I honestly think we are looking in periods of centuries in order to pay off what we have been borrowing.
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Re: yet more post-election consequences - huge increase in government jobs
Deogol, you very well may be right. Reading Melonie's posts scares me more than anything Hollywood sells as "horror". She knows what she's talking about and has been right most of the time in terms of her past messages. I think the next 5-10 years will be quite the thrill ride.
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Re: yet more post-election consequences - huge increase in government jobs
I think it would be a good time for a large transfer of wealth from the super rich to the super poor in every country. Try that out for a change.
Melonie: I'm not wishing for anything. When the US gets a cold...we get the flu. If you guys are fucked, we're gonna feel it. I just can't think of a better goal than getting people working, so they can pay taxes, and they can be consumers. If you don't have consumers you got nada. Same thing here in Canada...put them to work in something, anything. But whatever you guys do down there, we are in good enough shape to react effectively. Our financial institutions are strong, and we've run surpluses for many years and have paid down our debt. I'm not afraid.
Obviously the status quo is not going to cut it. So putting people to work however it is done seems sensible to me. But if you were to choose to put people out of work, well, it's your country. Do you think that would be better?
If the election had never happened, and Bush was still gonna be there, what would you want to see happen next? More of the same?
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Re: yet more post-election consequences - huge increase in government jobs
Sorry, but I am gonna go with Paul Krugman (you know, the Nobel Prize winner...) when he recommended, in an MSNBC interview, that the Federal Government be the one to create the jobs when neither the consumer nor the business community is no longer up to the task...
Besides, I think you can trust the Government moreso than the average businessman that those created jobs will actually STAY in the United States rather than be off-shored in some Third World country!:D:D
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Re: yet more post-election consequences - huge increase in government jobs
Paul Krugman Interview
Excerpt:
Quote:
I do worry that a coalition of Republicans and Blue Dogs will block some needed measures, and that policy will be too cautious. I'm less worried that the "FDR made the Depression worse" people will have much influence -- they may get lots of Wall Street Journal ink, but they're pretty discredited.
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Re: yet more post-election consequences - huge increase in government jobs
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Originally Posted by
hockeybobby
I think it would be a good time for a large transfer of wealth from the super rich to the super poor in every country. Try that out for a change.
Why? For taking risks others didn't take. For working hard to make it? ohh and the transfer has been going on for quiet some time.
Quote:
Originally Posted by
NWoD
Besides, I think you can trust the Government moreso than the average businessman that those created jobs will actually STAY in the United States rather than be off-shored in some Third World country!:D:D
Well, the thing is that you can't trust the govt.
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Re: yet more post-election consequences - huge increase in government jobs
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Originally Posted by
deogol
at least the illegals will have jobs i guess.
Highly Doubtful.
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Re: yet more post-election consequences - huge increase in government jobs
Quote:
Originally Posted by
Deogol
I honestly think we are looking in periods of centuries in order to pay off what we have been borrowing.
They have no motive of paying it off. Ever.
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Re: yet more post-election consequences - huge increase in government jobs
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Originally Posted by
glambman
Why? For taking risks others didn't take. For working hard to make it?....
No, largely for exploiting others that the poor couldn't.
The poor (not welfare cases) work a lot harder than the rich in many cases, often it is only manual labor due to things like lack of capital and training.
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Re: yet more post-election consequences - huge increase in government jobs
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Originally Posted by
glambman
Well, the thing is that you can't trust the govt.
Well,then we are completly out of luck. Because we sure as hell can't trust (Some) businessmen either. It's not the risks they take, it's the manipluation of others. A great example of this is how Microsoft thru the years has stolen other companies' trade secrets and products and then swamped them in court when they tried to seek justice. (Actually you can't trust the courts either.) So we end up with buggy unreliable unsafe products and they end up with their founder as the world's richest man.
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Re: yet more post-election consequences - huge increase in government jobs
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Originally Posted by
threlayer
No, largely for exploiting others that the poor couldn't.
The poor (not welfare cases) work a lot harder than the rich in many cases, often it is only manual labor due to things like lack of capital and training.
You have no idea. That 'rich' person took a personal risk in order to start his company. He probably worked 80 hour weeks to see it grow and become successful. He also has more things to deal with then an average employee. So you can't really say that he didn't work as hard.
Just because someone employs others, does not mean he is exploiting others. Your use of it is similar to the propaganda we get from the leftist groups where they change exploit, not to mean taking advantage/ abusing others, but as 'to make more efficient'. ohhh progress is sooooo bad.
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Re: yet more post-election consequences - huge increase in government jobs
Quote:
Originally Posted by
glambman
You have no idea. That 'rich' person took a personal risk in order to start his company. He probably worked 80 hour weeks to see it grow and become successful. He also has more things to deal with then an average employee. So you can't really say that he didn't work as hard.
Just because someone employs others, does not mean he is exploiting others. Your use of it is similar to the propaganda we get from the leftist groups where they change exploit, not to mean taking advantage/ abusing others, but as 'to make more efficient'. ohhh progress is sooooo bad.
I know about startups. But after they become successful, it becomes a vastly different story in many cases. I'm not talking 'all'. I'm talking many of them. I'm also talking about greed being the exclusive goal with jobs, workers, other comnanies just being objects to exploit. Bet you can think of examples too.
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Re: yet more post-election consequences - huge increase in government jobs
Quote:
Originally Posted by
threlayer
I know about startups. But after they become successful, it becomes a vastly different story in many cases. I'm not talking 'all'. I'm talking many of them. I'm also talking about greed being the exclusive goal with jobs, workers, other comnanies just being objects to exploit. Bet you can think of examples too.
And I can think of examples that are also Union, Universities, etc..
Just because Milken did what he did, doesn't mean every (or even most) bond sellers are evil. Or that all people are evil because of the people who bought them expecting high yields.
Some = guilty does not mean all (most) = guilty
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Re: yet more post-election consequences - huge increase in government jobs
Oh the horror of provided jobs for people who need them. Ofcourse it would be better to let them starve to death rather than provide services the country needs. I mean seriously, hello, duh! :sarcastic
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Re: yet more post-election consequences - huge increase in government jobs
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Originally Posted by
Lucy in the Sky
Oh the horror of provided jobs for people who need them. Ofcourse it would be better to let them starve to death rather than provide services the country needs. I mean seriously, hello, duh! :sarcastic
So why not have the govt buy the Big 3 and then they could triple employment levels at the factories, maybe even triple franchise employment. Never mind that sales are seriously down. Never mind, the govt can pick up the tab.
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Re: yet more post-election consequences - huge increase in government jobs
The people who are most affected by the recession, those who will suffer the most, could be helped by those who most have the means to help them: the wealthy. The government can facilitate this by increasing taxes for the wealthy, and distributing this money through various job createing means.
The most effective way to make a difference is a direct investment in .
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Re: yet more post-election consequences - huge increase in government jobs
Quote:
Originally Posted by
hockeybobby
The people who are most affected by the recession, those who will suffer the most, could be helped by those who most have the means to help them: the wealthy. The government can facilitate this by increasing taxes for the wealthy, and distributing this money through various job createing means.
The most effective way to make a difference is a direct investment in .
LOL tell me you didnt say this HB.
FBR
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Re: yet more post-election consequences - huge increase in government jobs
Quote:
Originally Posted by
FBR
LOL tell me you didnt say this HB.
FBR
Quote:
Originally Posted by
hockeybobby
The people who are most affected by the recession, those who will suffer the most, could be helped by those who most have the means to help them: the wealthy. The government can facilitate this by increasing taxes for the wealthy, and distributing this money through various job createing means.
The most effective way to make a difference is a direct investment in .
I'm saying it is an option FBR. Of course, saying "fuck it, every man for himself" is also an option. What is the right thing to do? The tax dollars are being doled out by the billions as we chat. As a successful man...a winner in the U.S., wouldn't you like to see those dollars putting people to work? The best social program is a job.
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Re: yet more post-election consequences - huge increase in government jobs
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The best social program is a job
not when that job is the direct result of a new social program !