Welcome, Guest. Please login or register.
Did you miss your activation email?
November 19, 2017, 07:05:40 pm
HomePredMockPollEVCalcAFEWIKIHelpLogin Register
News: Be sure to enable your "Ultimate Profile" for even more goodies on your profile page!

+  Atlas Forum
|-+  General Politics
| |-+  Economics (Moderator: Torie)
| | |-+  Government Spending: What Are the Benefits?
« previous next »
Pages: [1] Print
Author Topic: Government Spending: What Are the Benefits?  (Read 3683 times)
Fine...I Made This More Civil
persepolis
Sr. Member
****
Posts: 467


View Profile
« on: March 12, 2009, 06:01:05 pm »
Ignore

This widespread spending seems to meet no end. How will this spending supposedly help America. I have gone around, and I haven't found a suitable answer. What is the point of spending so much money on fiscal stimulus packages and whatnot?
Logged

Do Americans really need the government to shell out billions of dollars to large corporations, who then go to their sorry-excuses-for-executives and give them bonuses? I think not....
Јas
Jas
YaBB God
*****
Posts: 10150
View Profile
« Reply #1 on: March 12, 2009, 06:06:42 pm »
Ignore

This widespread spending seems to meet no end. How will this spending supposedly help America. I have gone around, and I haven't found a suitable answer. What is the point of spending so much money on fiscal stimulus packages and whatnot?

Logged
Queen Mum Inks.LWC
Inks.LWC
YaBB God
*****
Posts: 35207
United States


Political Matrix
E: 6.45, S: -1.57


View Profile WWW
« Reply #2 on: March 13, 2009, 03:18:38 am »
Ignore

To create jobs.
Logged
Gustaf
Moderators
YaBB God
*****
Posts: 28651


Political Matrix
E: 0.39, S: -0.70

P

View Profile
« Reply #3 on: March 13, 2009, 04:46:52 pm »
Ignore

There are three simple answers:

1. by shifting money towards those with little money you increase consumption (and decrease savings). If the economy is suffering from lack of demand that is good.

2. If you borrow and spend you get the same effect but more efficiently.

3. The whole bank-side is about making the market liquid again so people dare borrow.
Logged

This place really has become a cesspool of degenerate whores...

Economic score: +0.9
Social score: -2.61

In MN for fantasy stuff, member of the most recently dissolved centrist party.
Fine...I Made This More Civil
persepolis
Sr. Member
****
Posts: 467


View Profile
« Reply #4 on: March 17, 2009, 05:58:12 pm »
Ignore

OK, now I understand the point of view that has brought this spending upon us. However, wouldn't this expansion of government eventually cause our demise?
Logged

Do Americans really need the government to shell out billions of dollars to large corporations, who then go to their sorry-excuses-for-executives and give them bonuses? I think not....
Queen Mum Inks.LWC
Inks.LWC
YaBB God
*****
Posts: 35207
United States


Political Matrix
E: 6.45, S: -1.57


View Profile WWW
« Reply #5 on: March 17, 2009, 06:00:35 pm »
Ignore

OK, now I understand the point of view that has brought this spending upon us. However, wouldn't this expansion of government eventually cause our demise?

Eventually, the spending doesn't happen in such massive quantities (in theory).  Now, in practice, it's much harder to stop.
Logged
Fine...I Made This More Civil
persepolis
Sr. Member
****
Posts: 467


View Profile
« Reply #6 on: March 17, 2009, 06:12:48 pm »
Ignore

OK, now I understand the point of view that has brought this spending upon us. However, wouldn't this expansion of government eventually cause our demise?

Eventually, the spending doesn't happen in such massive quantities (in theory).  Now, in practice, it's much harder to stop.

This is only making me feel worse. This is like a cart running down a street in San Francisco. It won't stop till it has hit rock bottom.
Logged

Do Americans really need the government to shell out billions of dollars to large corporations, who then go to their sorry-excuses-for-executives and give them bonuses? I think not....
Lunar
YaBB God
*****
Posts: 30434
Ireland, Republic of
View Profile
« Reply #7 on: March 17, 2009, 09:59:08 pm »
Ignore

Some might also be inclined to point out that it's almost impossible NOT to run up the deficit during a recession.  Your revenues are crashing - the poor are losing their jobs, businesses have ceased investing, and the rich are losing vast amounts of their income - while your social expenditures like unemployment are going up.  If you cut anything then you are creating another unemployed worker who is going to spend less, pay no taxes, and simply absorb the government's benefits (or starve) until jobs start coming back to the economy.

This issue is obviously tangent to the idea of a specific Keynesian spending package, and the whole issue is infinitely more complex than that, I just thought I'd point out some obvious on this thread. 
« Last Edit: March 18, 2009, 12:06:54 am by Lunar »Logged

this is real
Purple State
YaBB God
*****
Posts: 6747
United States


View Profile
« Reply #8 on: March 17, 2009, 10:39:33 pm »
Ignore

OK, now I understand the point of view that has brought this spending upon us. However, wouldn't this expansion of government eventually cause our demise?

Eventually, the spending doesn't happen in such massive quantities (in theory).  Now, in practice, it's much harder to stop.

This is only making me feel worse. This is like a cart running down a street in San Francisco. It won't stop till it has hit rock bottom.

The hope is that the massive cash being injected right now by the government will spark an increase in private investment back to former levels, allowing the government to reduce its spending.

Condensing the crisis and economic theory, simply:

1. The crisis has caused a credit-freeze, reducing the amount of money people can spend in the system.

2. Lack of money has led people to save more and spend less, meaning less consumption and private investment.

3. Falling investment has a dramatic effect on the GDP, even greater than actual fall in investment.

So how do we fix that dramatic decline? Luckily, an increase in government investment (read: spending) has the same effect as private investment. So an increase in G leads to a greater increase in GDP. As GDP rises and the market emerges from the crisis the credit will unfreeze, consumption and private investment will increase and we can decrease government spending.
Logged

Marokai/Purple Main Campaign Thread

Thank you to all our supporters!

Gustaf
Moderators
YaBB God
*****
Posts: 28651


Political Matrix
E: 0.39, S: -0.70

P

View Profile
« Reply #9 on: March 18, 2009, 04:48:07 am »
Ignore

OK, now I understand the point of view that has brought this spending upon us. However, wouldn't this expansion of government eventually cause our demise?

Lol. I am living in a country right now that has a government about 60% bigger than the American. We haven't demised...
Logged

This place really has become a cesspool of degenerate whores...

Economic score: +0.9
Social score: -2.61

In MN for fantasy stuff, member of the most recently dissolved centrist party.
opebo
YaBB God
*****
Posts: 47113


View Profile
« Reply #10 on: March 18, 2009, 06:06:56 am »
Ignore

It's not supposed to last forever, just until the economy starts to refill the void it created, then you scale back.  Or at least you're supposed to.  I can think of one President in the last century that understood that.

Even if one agrees that a specific level of government spending is best (and I don't), all that matters is you return to the previous level as a percentage of GDP, not to any absolute level.  I think many presidents have done this:


Logged

The essence of democracy at its purest is a lynch mob

Queen Mum Inks.LWC
Inks.LWC
YaBB God
*****
Posts: 35207
United States


Political Matrix
E: 6.45, S: -1.57


View Profile WWW
« Reply #11 on: March 18, 2009, 11:47:07 am »
Ignore

OK, now I understand the point of view that has brought this spending upon us. However, wouldn't this expansion of government eventually cause our demise?

Eventually, the spending doesn't happen in such massive quantities (in theory).  Now, in practice, it's much harder to stop.

This is only making me feel worse. This is like a cart running down a street in San Francisco. It won't stop till it has hit rock bottom.

Look at all the spending started during the New Deal.  It's supposed to end, but it often doesn't.
Logged
opebo
YaBB God
*****
Posts: 47113


View Profile
« Reply #12 on: March 18, 2009, 12:22:29 pm »
Ignore

Look at all the spending started during the New Deal.  It's supposed to end...

no it isnt
Logged

The essence of democracy at its purest is a lynch mob

Queen Mum Inks.LWC
Inks.LWC
YaBB God
*****
Posts: 35207
United States


Political Matrix
E: 6.45, S: -1.57


View Profile WWW
« Reply #13 on: March 18, 2009, 07:54:37 pm »
Ignore

Look at all the spending started during the New Deal.  It's supposed to end...

no it isnt

I meant spending now is supposed to end, like much of the New Deal spending was supposed to end, but didn't.  What we have left from the New Deal now will probably be with us forever.
Logged
Purple State
YaBB God
*****
Posts: 6747
United States


View Profile
« Reply #14 on: March 18, 2009, 08:16:24 pm »
Ignore

Look at all the spending started during the New Deal.  It's supposed to end...

no it isnt

I meant spending now is supposed to end, like much of the New Deal spending was supposed to end, but didn't.  What we have left from the New Deal now will probably be with us forever.

I don't know how  much you can relate this is to the New Deal. FDR started a lot of new programs that started the social safety net. Obama is spending money to jump start businesses, temporarily cutting taxes and patching certain spending. Some of it will likely be permanent or long-term, but I'd say there will be little residual by the end of the next decade. It will be replaced by private investment.

On the other hand, the rest of his agenda (read:budget) will likely have similar long-term effects on the economy and institutions, but hopefully that will save us money in the long run (i.e. fixing Medicaid/care; energy initiatives).
Logged

Marokai/Purple Main Campaign Thread

Thank you to all our supporters!

Nym90
nym90
Modadmin
YaBB God
*****
Posts: 16321
United States


Political Matrix
E: -5.55, S: -2.96


View Profile
« Reply #15 on: March 18, 2009, 09:59:41 pm »
Ignore

Look at all the spending started during the New Deal.  It's supposed to end...

no it isnt

I meant spending now is supposed to end, like much of the New Deal spending was supposed to end, but didn't.  What we have left from the New Deal now will probably be with us forever.

Well, if your party wants to propose the elimination of Social Security or the FDIC, feel free. Smiley
Logged
opebo
YaBB God
*****
Posts: 47113


View Profile
« Reply #16 on: March 19, 2009, 03:24:46 am »
Ignore

Look at all the spending started during the New Deal.  It's supposed to end...

no it isnt

I meant spending now is supposed to end, like much of the New Deal spending was supposed to end, but didn't.  What we have left from the New Deal now will probably be with us forever.

Dude, the idea is that the safety-net - the welfare state - will always be there, and that it will thus automatically increase spending when times are bad and lower them when times are good.  People will go on and off the dole as need be. 

It exerts a tremendously benenficial stabilizing effect, as well as encourages the confidence to consume (in a normal capitalist society workers would be afraid to consume beyond a minimal shack and basic gruel, since by definition the worker's position in capitalism is so precarious).
Logged

The essence of democracy at its purest is a lynch mob

Pages: [1] Print 
« previous next »
Jump to:  


Login with username, password and session length

Logout

Powered by SMF 1.1.21 | SMF © 2015, Simple Machines