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US economic recovery theory... Options · View
MrNudiePants
Posted: Tuesday, August 24, 2010 2:46:03 PM

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I'm first!
WellMadeMale
Posted: Tuesday, August 24, 2010 3:30:51 PM

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Posts: 10,426
Location: Cakeland, United States
MrNudiePants wrote:
I'm first!


LMAO - THAT is not a surprise...



If ya can't beat 'em... pay someone to do it for you.
rougerogue
Posted: Tuesday, August 24, 2010 3:43:57 PM

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Sadly I think X is trying to get Obama to sort out that prize for you Mr Nudie Pants haha.
nicola
Posted: Tuesday, August 24, 2010 4:05:12 PM

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Do you believe it's a double dip recession, or are you guys even out of the first dip yet?

From what I've read on a lot of independent financial sites, the worst is yet to come. If you believe the doomsayers, it's time to cash in all your stocks, shares, and turn them into cash.

I don't go along with this theory entirely since the US is printing so much money right now, it can only devalue the currency base, so your cash holdings will be worth less. Mind you, if your shares halve in value as mine did almost overnight in 2007, it might be wise to put the majority of your wealth into cash instead.

I'm interested to read people's takes on the situation here too coffee
Rembacher
Posted: Tuesday, August 24, 2010 4:18:18 PM

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I'm not sure about this double dip. I know Canada's economy is rebounding right now, but since 80% of our exports go to the US, if the US economy experiences a double dip it could spell trouble for us. I tend to think with the money being tossed around a double dip is unlikely, if anything, the continued devaluation of the US currency should help them price themselves back in to the world market.
Guest
Posted: Tuesday, August 24, 2010 4:48:21 PM

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I think this thread was started as a smartass comment in response to something ladyx posted in another thread.

Quote:

First one to start a thread on US economic recovery theory gets a free cyber handjob! evil4


LadyX
Posted: Tuesday, August 24, 2010 4:55:20 PM

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chefkathleen wrote:
I think this thread was started as a smartass comment in response to something ladyx posted in another thread.

Quote:

First one to start a thread on US economic recovery theory gets a free cyber handjob! evil4




LOL- ya it was, but it got us what was needed. If only my smartass comments were taken seriously more often. Then again, maybe that wouldn't be such a good thing.

It's a good subject now that we've got it though, and Nudes will get his free pretend hand job. A deal's a deal.glasses8



I've heard not-so-good things too, and I'm far from a professional or a professor of economics. People talk about another recession, but who out there feels like we're out of the one we've been in? It's terrible out there, and it's better where I am than most places, from what I hear. It's damn sure better than it is in California.

I heard that the banks are basically doing the same scams that they were doing before the crash, which helped cause the crash to begin with, and also there are tons of buildings in default, but the bank finds ways to hide them so they don't all get reported as defaulted, which would make their stocks sink, which makes a lot of other stocks sink too.

Hard to be optimistic, just from what little I overhear or read. Is this the way it is around the world? Or is it the other way around, where if the US has a bad economy, then the rest of the world will suffer too?
Guest
Posted: Tuesday, August 24, 2010 5:33:16 PM

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the economy will crash again. The economy is being propped up with dead end government spending. Lets take one single aspect of ill fated and short sighted Stimulus Bill. The part of the bill gave 1.35 million dollars to repave Rodeo Dr. Sure the company that won the bid made money and the companies the do business with made some but that is it. When the job was done there is no more revenue being generated. Will someone spend more money because Rodeo Drive is newly paved? the answer is NO. They will spend money only if they have money to spend no matter whether the road is paved or not.

Now take that million dollars plus dollars and give it in grants to help one or more small business expand or even be created. The business will buy material, hire workers and produce a product, all which will generate income and the product the generate will sales tax. Does that stop after only one product is built or sold. The answer to that class is NO. They will continue to generate product, buy supplies and if allowed to do business without government interference will do so long after all the money to pave that one road is done and gone.

Government spending is almost always short sighted and dead end. It does not and can not replicate what the free market enterprise can do. On top of that the spending that Obama "created" will have to be paid for somehow and all of our children will feel that pain. The bill will come due at some point. Most likely long after Obama's one term is long over and classified as the worst ever for a President.

In short the when the government spending is over with the free market will need to readjust it self and a double dip recession is inevitable. You do not need to take all your money out of the bank and sell all your stocks but like my investments and saving need to be is safer aspects and not completely linked to the stock market which will go down lower than the previous recession.

As the great President Ronald Regen once said " The governments view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

Rembacher
Posted: Tuesday, August 24, 2010 6:15:33 PM

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terd_furgeson wrote:
the economy will crash again. The economy is being propped up with dead end government spending. Lets take one single aspect of ill fated and short sighted Stimulus Bill. The part of the bill gave 1.35 million dollars to repave Rodeo Dr. Sure the company that won the bid made money and the companies the do business with made some but that is it. When the job was done there is no more revenue being generated. Will someone spend more money because Rodeo Drive is newly paved? the answer is NO. They will spend money only if they have money to spend no matter whether the road is paved or not.

Now take that million dollars plus dollars and give it in grants to help one or more small business expand or even be created. The business will buy material, hire workers and produce a product, all which will generate income and the product the generate will sales tax. Does that stop after only one product is built or sold. The answer to that class is NO. They will continue to generate product, buy supplies and if allowed to do business without government interference will do so long after all the money to pave that one road is done and gone.




I'm confused. What is the difference between these two examples, other than in the first one the company actually did work to earn money? Why does the construction company not hire workers to do the work, and buy supplies such as shovels, gravel, ashphalt, replacement parts for machinery, etc? Or is it just that you don't feel construction companies provide sustainable production? Just like any other company, if the demand is there for the product or service, they will continue working to provide it.

People are funny, and hard to please. They will bitch that a road needs work, and isn't safe to drive on. They will bitch about the construction on the road that slows them down, and then they will bitch about how the government spent their money to fix a road they rarely drive on. And then time goes by, and the road gets rundown again, they do it all again. What better time to spend money on infrastructure than when people are looking for work?
Guest
Posted: Tuesday, August 24, 2010 6:15:47 PM

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terd_furgeson wrote:
the economy will crash again.




Shit I don't think it's done crashing yet. It doesn't seem to be around here as of yet. Stores are being built around here where I live yet no one is going in them why? Cause rents are to fucking high.
nicola
Posted: Tuesday, August 24, 2010 6:55:22 PM

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chefkathleen wrote:
I think this thread was started as a smartass comment in response to something ladyx posted in another thread.


I don't have enough time to read everything on these boards anymore.

Still, it's an interesting question, and I hope Nudie enjoys his virtual handjob. How does that work exactly? dontknow
MrNudiePants
Posted: Tuesday, August 24, 2010 7:21:55 PM

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nicola wrote:
chefkathleen wrote:
I think this thread was started as a smartass comment in response to something ladyx posted in another thread.


I don't have enough time to read everything on these boards anymore.

Still, it's an interesting question, and I hope Nudie enjoys his virtual handjob. How does that work exactly? dontknow


I'm not exactly sure, Nic, but I'm hoping LadyX can start me off in the right direction. (LOL)

Okay, I see now that I should have posted a link so people who didn't see that thread would get the joke - mea culpa, my friends.

I heard on the news that the country is indeed on it's way to a double dip. I know that the company I work for is nearly ready to close it's doors. I know of quite a few other companies in the same area that have already gone under. We have record unemployment. I'm seeing unemployed guys on the street corners selling cold bottled water to motorists who run without their A/C's on to save on gas. I see vacant stores in strip malls that were full a couple years ago. I see home foreclosures that have been on the market for years not selling. I know a guy that hasn't paid his mortgage in two years and the bank doesn't care about kicking him out because they don't have anybody to take over caring for another empty house.

I do have one question that I'd like to see answered: What impact on the world economy does a dip in America's own economy have? And this discussion really needs to be free from partisan politics. I mean, really... Democrats and Republicans both have had amply opportunities to try and "fix" things and both have done nothing but continue to run up debt that we can't even begin to pay back. The whole "Obama did this..." and "Bush did that..." but "Carter did..." but "Reagan was God..." mantras are absolutely pointless when it comes to kicking around ideas on how to actually make positive changes...
nicola
Posted: Tuesday, August 24, 2010 8:57:26 PM

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MrNudiePants wrote:
I do have one question that I'd like to see answered: What impact on the world economy does a dip in America's own economy have?


Your economy is nearly 3 times larger than the second largest in the world, so it has a huge impact globally. If you have a double dip, so too does the rest of the world.

Our All Ords (share market) was around 6500 when the recession hit, it's now around 4500, and we're supposedly in a good financial state in Australia.

Recessions don't last forever, there's no point dwelling on the negative.
Guest
Posted: Tuesday, August 24, 2010 11:43:20 PM

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Jebru the examples are completely different. It is meant to show that when the when the government spends money in what they call "stimulus" to build a road after the road is built there is no other income or taxes to be generated. If you spend the money to help businesses to be started or expanded the money you spend continues to generate long after the money is spent. Think of it this way...you are given $100 and you buy a new DVD player. Once you spend the $100 on the DVD player the money is spent and gone. But if you take the $100 and invest it, the $100 will make money over and over and over again as long as you leave it in the investment.

the government "spent" the money to repave the street. It is spent and now is gone. There is no other income being generated. If they had taken that money and "invested" it in a small business(es) the money would be now making money for the government. If the money was given as a low interest SBA loan it would have been repaid over time and would not have cost the our children anything.

MrNudiePants our recession has a huge impact around the world considering we are the largest consumer in the world. If we aren't buying products from other countries there is not much of a market for them in other countries.

nicola..Recessions dont last forever but they are cyclical and will continue to happen unless we make major changes and government spending is not the answer
nicola
Posted: Wednesday, August 25, 2010 12:04:33 AM

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terd_furgeson wrote:
there is not much of a market for them in other countries.


Actually, that's not true, you're the major consumer yes, but there's still 75% of the ROW for countries to trade with: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal).

But yes, it's a massive blow to the world economy if you guys are in trouble, that's for sure, and of course it has a knock on effect.
Rembacher
Posted: Wednesday, August 25, 2010 12:18:27 AM

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terd_furgeson wrote:
Jebru the examples are completely different. It is meant to show that when the when the government spends money in what they call "stimulus" to build a road after the road is built there is no other income or taxes to be generated. If you spend the money to help businesses to be started or expanded the money you spend continues to generate long after the money is spent. Think of it this way...you are given $100 and you buy a new DVD player. Once you spend the $100 on the DVD player the money is spent and gone. But if you take the $100 and invest it, the $100 will make money over and over and over again as long as you leave it in the investment.

the government "spent" the money to repave the street. It is spent and now is gone. There is no other income being generated. If they had taken that money and "invested" it in a small business(es) the money would be now making money for the government. If the money was given as a low interest SBA loan it would have been repaid over time and would not have cost the our children anything.


Ok, first thing, your initial comment was grants or tax breaks, not investing like it is here. And secondly, the money doesn't stop when someone buys a DVD player. For me personally it would, but for the government, especially with sales tax, it keeps coming back. You see, if I buy that dvd player, the retailer is going to take about 90 dollars of that and buy one to replace it. The retailer will then split the other 10 dollars between operating costs, and company profit. From those opereating costs, the employees get paid, and they spend that money on both necessities, and luxury items. The dvd supplier does the same thing. Takes the 90 dollars, 10 to cover costs and profit, 80 to the manufacturer. The manufacturer takes the money and spend 10 on costs and profits, and 70 to the raw materials suppliers, who would use that money again for profit, costs, and supplies. I could keep going, but you get the picture. Forgetting the 10 dollars for employees and company, my 100 dollar dvd player purchase has already created 340 dollars for the economy.

And last I heard, the US government was investing, they own parts of the auto companies, and what, half the US banking industry? Or was that not the type of investing you had in mind either?
MrNudiePants
Posted: Wednesday, August 25, 2010 5:20:48 AM

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terd_furgeson wrote:

the government "spent" the money to repave the street. It is spent and now is gone. There is no other income being generated. If they had taken that money and "invested" it in a small business(es) the money would be now making money for the government. If the money was given as a low interest SBA loan it would have been repaid over time and would not have cost the our children anything.


Okay, that money was "spent" and not "invested". But the paving contractor can now stay open another few months. They can afford to make payroll. Their employees take their paychecks and buy food, gasoline, they can pay their mortgages, keeping their homes out of the foreclosure market. The money reaches a far broader segment of society than it would any other way.

Suppose you do use it to make an SBA loan - there's no guarantee that the company you help start will be competitive, or successful. You're rolling the dice, knowing full well that most startups fail their first year. If that happens, the money vanishes, never to reach any real segment of society at all. What's better?
mercianknight
Posted: Wednesday, August 25, 2010 6:19:55 AM

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Ooh! This is a goodie!

To depress you all even more, if the comparisons to the Great Depression hold true, then we are in for more than a double dip. Following the crash of 1929 there were 6 more 'dips'. The stock market was lower in 1933 than it was after the first crash in 1929. And holding cash was a bust once inflation raised it's head (obviously not as disasterous as in the German Weimar Replublic, but that's another story).

Bottom line, only hindsight will tell us whether the European strategy for cutting national debt or the US strategy of unfettered spending was the correct course. I have my own opinion. The recession is far from over, but the looming change in global dynamics looks promising. The western-style economies (to include Australia et al) see the need to 'produce' goods and to be less reliant on cheaper (inferior quality?) consumables from China and the like. It will take some years, but hopefully the change will be greener and for the better - and "NO" that last comment does not mean I've become a tree hugger!!


"Whoa, lady, I only speak two languages, English and bad English." - Korben Dallas, from The Fifth Element

"If history repeats itself, and the unexpected always happens, how incapable must man be of learning from experience?" - George Bernard Shaw
MrNudiePants
Posted: Wednesday, August 25, 2010 6:55:24 AM

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mercianknight wrote:
Ooh! This is a goodie!

To depress you all even more, if the comparisons to the Great Depression hold true, then we are in for more than a double dip. Following the crash of 1929 there were 6 more 'dips'. The stock market was lower in 1933 than it was after the first crash in 1929. And holding cash was a bust once inflation raised it's head (obviously not as disasterous as in the German Weimar Replublic, but that's another story).


I've read several places that it's wise to start taking your money out of volatile markets (even cash-based investments) and stop holding cash. Instead, buy actual durable goods like bullion. You can even buy food that's meant for long-term storage. Eventually, a can o'Spam will be worth more than it's weight in paper currency. How long before America is like Zimbabwe where the national currency is actually worthless?
Guest
Posted: Wednesday, August 25, 2010 8:41:04 AM

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MrNudiePants wrote:
terd_furgeson wrote:

the government "spent" the money to repave the street. It is spent and now is gone. There is no other income being generated. If they had taken that money and "invested" it in a small business(es) the money would be now making money for the government. If the money was given as a low interest SBA loan it would have been repaid over time and would not have cost the our children anything.


Okay, that money was "spent" and not "invested". But the paving contractor can now stay open another few months. They can afford to make payroll. Their employees take their paychecks and buy food, gasoline, they can pay their mortgages, keeping their homes out of the foreclosure market. The money reaches a far broader segment of society than it would any other way.

Suppose you do use it to make an SBA loan - there's no guarantee that the company you help start will be competitive, or successful. You're rolling the dice, knowing full well that most startups fail their first year. If that happens, the money vanishes, never to reach any real segment of society at all. What's better?



yes it helped the the paving company make one or maybe two payrolls but that is it. Done and gone. BUT a low interest SBA loan helps a company but products, make multiple payrolls over a longer period of time and while they are making those payrolls they ate making payments back. Along with that if the business fails there is ways to recoup the money. Along with that as the money is paid back in can be reinvested in new loans and further income. And yes the money loaned in a SBA loan does reach society. It is spent just like the paving company did. They buy products, make payroll and their employees pay their bills and mortgages, buy food and gasoline. But they continue to do it for the same "few" months and in most cases even longer.

The money given to pave the road is gone and never has to be paid back. Not one single dollar is recouped. It is short sighted and dead end.
MrNudiePants
Posted: Wednesday, August 25, 2010 9:25:58 AM

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terd_furgeson wrote:



yes it helped the the paving company make one or maybe two payrolls but that is it. Done and gone. BUT a low interest SBA loan helps a company but products, make multiple payrolls over a longer period of time and while they are making those payrolls they ate making payments back. Along with that if the business fails there is ways to recoup the money. Along with that as the money is paid back in can be reinvested in new loans and further income. And yes the money loaned in a SBA loan does reach society. It is spent just like the paving company did. They buy products, make payroll and their employees pay their bills and mortgages, buy food and gasoline. But they continue to do it for the same "few" months and in most cases even longer.


6(one) = (12/2)(other)

Both businesses use the money to buy products and pay salaries. SBA loans are actually underwritten by banks, and guaranteed by the government. The bank gets to keep any profits, while the government has to pay back any losses. The only real difference is that in one case the bank takes some of the money and in the other, the bank doesn't.
WellMadeMale
Posted: Wednesday, August 25, 2010 9:28:14 AM

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So, fuck a bunch of roads, infrastructure (Bridges/dams/electrical grids/public utilities - water/sewer)?

Because it's one and done?

Cut those fucking taxes baby. Cut 'em to nothing and then starve the government of any money so they can't spend it.

Terd, it's arguments like yours which simply make me shake my head, roll my eyes and tune out.

However, it makes perfect sense (in your world) to wage war and cut taxes (not paying for this war immediately) but deferring it's humongous costs to future generations - and finance the war(s) by borrowing vast sums of 'fiat money' from other investors (like Japan in the 1980s and China since the early 90s).

Hell, we can thumb our noses at China and start a war and tell 'em to fuck off "We aren't paying you back."

And live happily ever after?

If ya can't beat 'em... pay someone to do it for you.
WellMadeMale
Posted: Wednesday, August 25, 2010 9:47:18 AM

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America Won the Cold War But Now Is Turning Into the USSR, Gerald Celente - Dude is talking straight.

Probably a temporary Yahoo Finance - link. I have pasted the comments here, the video is on <that site.

There's a lot of talk these days about America being an empire in decline. Gerald Celente, director of the Trends Research Institute, goes a step further, arguing America is following a similar path as the former Soviet Union.

"While the many glaring differences between the two political systems have been exhaustively publicized - especially in the U.S. - the glaring similarities [go] unnoticed," Celente writes in The Trends Journal, which he publishes.

In the accompanying video, Celente describes some of these similarities, including:

A rotten political system: He compares politicians (Democrats and Republicans alike) to "Mafioso" and says campaign contributions are really thinly disguised "bribes and payoffs."

Crony capitalism: Like in the USSR of old, Celente laments that so much of America's wealth (93%) is controlled by such a small group small portion of its population (10%). Owing to that concentration of wealth, the government makes policies designed to reward "the bigs" at the expense of average citizens (see: Bailouts, banks).

Military-industrial complex: The USSR went bankrupt fighting the cold war and Celente fears the U.S. is "squandering its greater but still finite resources on a gargantuan defense budget, fighting unwinnable hot wars and feeding an insatiable military stationed on hundreds of bases worldwide."

As with many observers, Celente thinks America will suffer the same fate in Afghanistan as the USSR, the British Empire, Alexander the Great and all others who've ventured into the "graveyard of empires."

The irony, of course, is that while America defeated Soviet Communism and won the Cold War, perhaps our greatest threat today comes from China and its booming state-controlled economy.

If ya can't beat 'em... pay someone to do it for you.
WellMadeMale
Posted: Wednesday, August 25, 2010 10:02:11 AM

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Enron Accounting has bankrupted America (over 200 Trillion) in actual debt.

This is not the 1st time I've read this.

The US commercial real-estate market is about to tank. The bubble burst long ago, but...because the housing market bubble actually affected people more immediately, that's what has hogged the immediacy of the majority of our minds.

The Democrats and the Republicans in our national congress are not really two separate ideologies. They have been working as one (for lack of a better term) mafia, for many, many years.

Feathering their own nests in a multitude of ways, blatantly lying to us all.

All of 'us' who want to be Democrats or Republicans or Libertarians. They pit us against each other constantly, and we drink that koolaid.

If ya can't beat 'em... pay someone to do it for you.
mercianknight
Posted: Wednesday, August 25, 2010 10:05:58 AM

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WMM's post at 4:47:18 definitely gets my vote. thumbup

I'll find a comfortable spot on the fence regarding the other rants. wave

"Whoa, lady, I only speak two languages, English and bad English." - Korben Dallas, from The Fifth Element

"If history repeats itself, and the unexpected always happens, how incapable must man be of learning from experience?" - George Bernard Shaw
Rembacher
Posted: Wednesday, August 25, 2010 7:08:43 PM

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terd_furgeson wrote:
MrNudiePants wrote:
terd_furgeson wrote:

the government "spent" the money to repave the street. It is spent and now is gone. There is no other income being generated. If they had taken that money and "invested" it in a small business(es) the money would be now making money for the government. If the money was given as a low interest SBA loan it would have been repaid over time and would not have cost the our children anything.


Okay, that money was "spent" and not "invested". But the paving contractor can now stay open another few months. They can afford to make payroll. Their employees take their paychecks and buy food, gasoline, they can pay their mortgages, keeping their homes out of the foreclosure market. The money reaches a far broader segment of society than it would any other way.

Suppose you do use it to make an SBA loan - there's no guarantee that the company you help start will be competitive, or successful. You're rolling the dice, knowing full well that most startups fail their first year. If that happens, the money vanishes, never to reach any real segment of society at all. What's better?



yes it helped the the paving company make one or maybe two payrolls but that is it. Done and gone. BUT a low interest SBA loan helps a company but products, make multiple payrolls over a longer period of time and while they are making those payrolls they ate making payments back. Along with that if the business fails there is ways to recoup the money. Along with that as the money is paid back in can be reinvested in new loans and further income. And yes the money loaned in a SBA loan does reach society. It is spent just like the paving company did. They buy products, make payroll and their employees pay their bills and mortgages, buy food and gasoline. But they continue to do it for the same "few" months and in most cases even longer.

The money given to pave the road is gone and never has to be paid back. Not one single dollar is recouped. It is short sighted and dead end.


In a loan, the company has to pay the money back, which is harder on the company. I think just about every single company would rather get money from a customer, and use that to pay for its expenses than to borrow money it has to pay back with no guarantee that it will have the customers to pay it back.

I'm still not seeing the difference in the length of effect. Investing in a company that has no customers seems like far more of a gamble than being the customer of a company that is trying to stay in business and is looking for customers. I see the interest argument, although with interest rates as low as they are, it's a lot of risk for low reward. But I don't understand how paying a company for services doesn't last as long as money given, or invested in a company. I think I demonstrated above how the spending will continue, but I guess you prefer to ignore that and keep spouting your talking points. Don't just tell me it doesn't go as far, show me how $1.35 million doesn't go as far when it is used as a purchase rather than a loan or grant. Maybe I'll learn something. My economics classes taught me the model I used above. I simplified it, because I didn't want to confuse people by trying to factor in MPS (Marginal Propensity to Save) or MPC (Marginal Propensity to Consume).

These forums have a wide variety of people with a wide variety of backgrounds, and I always appreciate things being explained in a way I can understand, especially when it is an area where I don't have a lot of knowledge. I'm trying to repay the favour, but also hoping that you will explain your theory so that I can understand it. I definitely can't agree with you until I understand how you reach your conclusion. Probably still won't, but it's worth a shot. Or you can just keep saying the same talking point over and over, but you will have a hard time convincing anyone.
Guest
Posted: Thursday, August 26, 2010 1:20:56 AM

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Posts: 652,864
Jebru...I think you are missing my point so....

In either case the money is spent but what u fail to see is what makes the paving idea a short sighted dead end idea. The money given to pave the road is spent by the company that does the paving. It buys supplies and pays its employees and they in turn spend the money also right down the line. But that doesnt expand their business. in fact that business already exists and in no way helps the economy where it really needs help. Where i think you are missing my point is the loan is not for the business to pay everyday expenses. It is for the creation of a new business or for a business to expand. That is where the difference comes into effect. A business is created. They have to have a place to do business so there is money spent for rent or to purchase a building. the person or company that owns the building is now receiving additional income, which in turns helps their business. Next they need the hardware to do business, computers, desks, machinery. More money spent in the economy. They have to hire employees which in turn reduces unemployment. Supplies are purchased to produce what the company is going to sell which helps the business supplying the items. And all the while the initial money that was loaned to the company is being paid back with interest which in turn is loaned to new applicants. The original 1.35 million that was spent once to pave the road is now being spent over and over again as investment in new businesses. If you think about it the money can be spent a endless amount of times instead of just once.

If you extrapolate this idea out more it becomes clearer. The money that was invested does more than what i described above. the idea is that there is now more money being brought in by both the local and federal government. Sales tax is being generated, more workers paying federal and state income tax along with more in FICA taxes. More money for the government without having to raise taxes to do it. More in tax revenue also in the long run will lower the tax that is needed to be levied. More people paying taxes lowers the tax needed to bring in the same amount of revenue. Lower taxes for each person means more money for me and you to spend which then will stabilize and expand the economy. Ronald Regan understood it and made it work. Unfortunately Obama, Reid and Pulosi don't.

Again there will always be the start up company that fails but getting a SBA loan requires more than just saying you want it. You need a business plan and the hardware that is bought is collateral against the loan. In the long run the interest paid will cover the unpaid loans and pay back the money the government had to shell out in the stimulus bill.

The way this stimulus bill was written and the way that the money was spent, the government will never see it again. Not in our life time that is. Unfortunately our children will have to pay for it.
Rembacher
Posted: Thursday, August 26, 2010 9:37:08 AM

Rank: Forum Guru

Joined: 10/16/2008
Posts: 1,107
You are right, I was missing your point. Your logic is definitely different than mine. I see it as far more helpful to the economy in a recession to maintain the businesses that already have cumstomers, employ workers, and purchase supplies, rather than loan money to companies with a 50-90% chance of failing within the first five years. For the sake of argument we'll use 50% since that's what the SBA Website uses.

To me, your solution seems like pouring water in to a bucket with a hole in it. Just as that bucket will never fill, starting new businesses to create new jobs doesn't change the unemployment rate when existing business can't find enough customers to stay in business. Why not help the companies that already have at least some customers, and some idea of how to run a successful business? Because, let's face it, if they are still in business at this point in the recession, they must be doing something right.

As for the loans being used for companies to expand, you will have a very hard time finding companies willing to risk expansion right now. Yes, the theory sounds great, give them low interest loans and they will open new branches, factories, etc. But that's not smart business in an uncertain economy, especially with talk of the recession continuing or even worsening. Any good management team is looking to cut overhead right now, streamline their business in order to remain flexible, and survive the recession. The only way they are going to expand their operation is if they have so many customers that their current facilities can not handle them. And giving them a loan doesn't help that.

More successful businesses will mean more tax money. But companies that don't turn a profit don't pay income taxes, and even the 50% of companies that survive past 5 years rarely turn a profit within that time. If you can break even in the first 5 years you have a great business. So that's why I still say the best way to ensure more successful businesses is to actually buy products and services from existing companies, helping them to have enough customers to stay in business, or even expand.

I also argue with your premise that less money being charged in taxes increases the money the government has to spend. If you got a 2% tax break, would you really go out and spend more money when you still aren't sure whether you are going to have a job by the end of the year? I sure as hell wouldn't. Bush cut taxes compared to Clinton. His administration produced some of the biggest deficits the US has ever seen. And that was in good economic times. I'm guessing if I argued that Clinton had a surplus, you would tell me that it didn't exist, it was the result of a mirage, or wierd accounting practices. So I won't go there. Because I know, whatever accounting formula you use, whether Clinton had a surplus or a minor deficit, Bush still lost far more money.
WellMadeMale
Posted: Thursday, August 26, 2010 10:38:25 AM

Rank: Constant Gardener

Joined: 9/30/2009
Posts: 10,426
Location: Cakeland, United States
terd_furgeson wrote:
Ronald Regan understood it and made it work.


There is a serious plague of Alzheimer's associated with anything about that guy. He seemed to be a nice fellow, his wife regularly consulted with astrologers to help advise him on important decisions which would affect millions of people's lives. He was given a pretty nasty message, early on in his first term, by those who really pull the strings of US government...to play the game the way it should be played (good thing he selected a former CIA chief to be his Veep).

There were a number of extremely illegal activities going on behind the scenes throughout his tenure by those he chose (ahem, was told to select to appoint to various positions of influence and power). cough- Iran/Contra money/arms for hostages... Saddam as America's best buddy... October Surprise 1980 negotiations with Iran to release hostages... SDI & $500 hammers/toilet seats ... Supplying Mujahideen with Stingers (that has really worked great, years later) -cough

And he HIS glorious financial and de-regulatory policies were in full effect when the infamous Black Monday financial swindling / crash on Wall Street, occurred in 1987. Not to mention all his de-regulation and how rosy that has turned out over the last 25 years - affecting every facet of business in this country.

Yeah, he was a great president all right. And those are just a few of the low lights of his tenure. His 8 years followed by another 4 years of his Veep being Large and In-Charge is what led this country into monumentally MASSIVE debt (at that time) in the first place...

I would think that people would learn to pay attention to history...but no. We have trumpeters who either have forgotten or, as my previous gf theorizes..... "They are the pre-rich, Jeff...they think if they act like and talk like the wealthier GOP, they will be accepted into the fold someday." Pre-Rich Republicans - now that's more like it.




Actually, it's a great job of Revisionism being constantly perpetrated and foisted off on the other 75% of Americans who saw the 1980's as anything but great. Certainly not financially speaking (unless you were making 500k a year or more).

If ya can't beat 'em... pay someone to do it for you.
WellMadeMale
Posted: Sunday, September 05, 2010 9:32:17 AM

Rank: Constant Gardener

Joined: 9/30/2009
Posts: 10,426
Location: Cakeland, United States
After the Republican Party (henceforth referred to as GOP) wrested control of all (*4) branches of the government in 2000, they turned on the money transfer spigots big time.

True costs of the Iraq war: 3 Trillion and beyond

Writing in these pages in early 2008, we put the total cost to the United States of the Iraq war at $3 trillion. This price tag dwarfed previous estimates, including the Bush administration's 2003 projections of a $50 billion to $60 billion war.

The Iraq invasion diverted our attention from the Afghan war, now entering its 10th year. While "success" in Afghanistan might always have been elusive, we would probably have been able to assert more control over the Taliban, and suffered fewer casualties, if we had not been sidetracked. In 2003 -- the year we invaded Iraq -- the United States cut spending in Afghanistan to $14.7 billion (down from more than $20 billion in 2002), while we poured $53 billion into Iraq.

In 2004, 2005 and 2006, we spent at least four times as much money in Iraq as in Afghanistan.


There is no question that the Iraq war added substantially to the federal debt.

This was the first time in American history that the government cut taxes as it went to war. The result: a war completely funded by borrowing.

U.S. debt soared from $6.4 trillion in March 2003 to $10 trillion in 2008 (before the financial crisis); at least a quarter of that increase is directly attributable to the war. And that doesn't include future health care and disability payments for veterans, which will add another half-trillion dollars to the debt.

As a result of two costly wars funded by debt, our fiscal house was in dismal shape even before the financial crisis -- and those fiscal woes compounded the downturn.

[* - According to the Great Vice President Dick Cheney, the office of the Vice-President does not belong to the executive branch of the government (that's why he couldn't face subpoena for his part in outing Valerie Plame or answer for his secretive price fixing energy meetings with Ken Lay, the BinLaden family, et al... so 4 branches instead of 3 branches under full GOP control from Jan 2001 to Jan 2007]

If ya can't beat 'em... pay someone to do it for you.
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