An Economic Approach that Worked

[depittydawg]

The recent robust recovery of the German economy deserves some recognition. Especially when viewed in the backdrop of the lack of recovery in the US, Britain, and much of Europe. Looking at it in some detail the German model seems very similar to what the US did under then President Bill Clinton about 20 years ago. When all the conventional wisdom screamed for increased government spending and reduction of taxes, the German Government embarked on a campaign of austerity and belt tightening. It seems to have worked out pretty well for them.
Perhaps we should start looking at alternatives to Tax Cuts for the Wealthy cry of Republicans, or more welfare (oops I mean unemployment) for the terminally unemployed crys from the Democrats. Their are some models out their that are performing well.

http://www.nytimes.com/2010/08/14/wo...14germany.html
http://economics21.org/commentary/le...nomic-recovery
http://www.deseretnews.com/article/7...-recovery.html

[Buzz]

From Krugman's Blog:

Via Mark Thoma, Dean Baker points out that real government consumption of goods and services — that’s government buying things, as opposed to cutting taxes or handing out checks — has risen more in “austerity” Germany than in the United States.


Maybe you can help interpret these graphs for me. If not, maybe Henry can take a stab at it.

http://www.cepr.net/index.php/blogs/...-conservatives

[depittydawg]

From Krugman's Blog:

Via Mark Thoma, Dean Baker points out that real government consumption of goods and services — that’s government buying things, as opposed to cutting taxes or handing out checks — has risen more in “austerity” Germany than in the United States.


Maybe you can help interpret these graphs for me. If not, maybe Henry can take a stab at it.

http://www.cepr.net/index.php/blogs/...-conservatives

Ouch. From what I've read of contemporary conservative columnists, Brooks is probably on the high end of the curve for accuracy. In other words, I doubt the times can do any better so they stick with him.

[Buzz]

Ouch. From what I've read of contemporary conservative columnists, Brooks is probably on the high end of the curve for accuracy. In other words, I doubt the times can do any better so they stick with him.

Partly what he is driving at is the fact that nearly half of the stimulus done by the US was in tax cuts in order to placate the Republicans who did not and never would have voted for the bill, as well as the conservadems.

[tpaschal30]

Partly what he is driving at is the fact that nearly half of the stimulus done by the US was in tax cuts in order to placate the Republicans who did not and never would have voted for the bill, as well as the conservadems.

Why would they have to placate republicans? They can stop nothing. BTW. Please name those tax cuts. Clinton never cut crap. Until Newt took over the house(which appropriates BTW see civics) there were defecits as far as the eye can see.

[Buzz]

Why would they have to placate republicans? They can stop nothing. BTW. Please name those tax cuts. Clinton never cut crap. Until Newt took over the house(which appropriates BTW see civics) there were defecits as far as the eye can see.

Obama came into office thinking that he "being the chosen one" could somehow change how things were done in Washington. He bent over backwards trying to get bipartisan support for his agenda. Seems he's a slow learner...

I don't know how Clinton got into the conversation. I never mentioned him. I was talking about the composition of the "stimulus package." The point of the link I provided above was to show that the German government is actually "buying stuff" with their outlays.


http://topics.nytimes.com/top/refere...lus/index.html

THE FINAL BILL

Significant differences existed between the House and Senate versions of the stimulus package, primarily over tens of billions of dollars in aid to states and local governments, tax provisions and programs for education, health and renewable energy. But the negotiations between the two chambers and the White House moved rapidly, and on Feb. 11, a little more than 24 hours after the Senate vote, Congressional leaders announced an agreement on a $789 billion final bill.

The deal reflected a calculated gamble by Mr. Obama in the first weeks of his term. To win Republican votes, the final stimulus package is considerably leaner than what many economists say is now needed to jolt the economy, given its grave condition.

The final bill includes $507 billion in spending programs and $282 billion in tax relief, including a scaled-back version of Mr. Obama's middle-class tax cut proposal, which would give credits of up to $400 for individuals and $800 for families within certain income limits. It will also provide a one-time payment of $250 to recipients of Social Security and government disability support.

The bill contains more than $150 billion in public works projects for transportation, energy and technology, and $87 billion to help states meet rising Medicaid costs. Despite intense lobbying by governors around the country, the final deal slashed $25 billion from a proposed state fiscal stabilization fund, eliminated a $16 billion line item for school construction and sharply curtailed spending to provide health insurance for the unemployed. In driving down the total cost — from $838 billion for the Senate stimulus bill and $820 billion for the House-passed measure — lawmakers also reduced the Senate's proposed tax incentives for buyers of homes and cars. The final agreement retained a $70 billion tax break to spare millions of middle-income Americans from paying the alternative minimum tax in 2009. It also created a new tax credit for workers, at a cost of $116 billion.

[road kill]

Obama came into office thinking that he "being the chosen one" could somehow change how things were done in Washington. He bent over backwards trying to get bipartisan support for his agenda. Seems he's a slow learner...

I don't know how Clinton got into the conversation. I never mentioned him. I was talking about the composition of the "stimulus package." The point of the link I provided above was to show that the German government is actually "buying stuff" with their outlays.


http://topics.nytimes.com/top/refere...lus/index.html

Now, that right there is funny, I don't care who you are!!!




RK

[aandw]

Partly what he is driving at is the fact that nearly half of the stimulus done by the US was in tax cuts in order to placate the Republicans who did not and never would have voted for the bill, as well as the conservadems.

all compromise was to get all the votes from his on side. it had nothing to do with reps.

[Gerry Clinchy]

The point of the link I provided above was to show that the German government is actually "buying stuff" with their outlays.

I think that the point Buzz makes is a good one.

Someone posted a map (a while back) about where stimulus money went. When I checked my own area, I found that a lot of it went to school districts to avoid layoffs. Our state also used a lot of it to stave off layoffs of govt workers & just offset the deficit on its budget.

Since most people who have jobs are concentrating on saving and paying down credit, that money is not creating any real stimulus in the economy.

With energy prices going up (and people being encouraged to use less energy), money spent there is just getting the same amount of "stuff" as before, but paying more for the same "stuff". No new jobs created from that.

Possibly the utility companies are building more "green" plants? But our state, for example, is taking that $ with a penalty on the utility companies for not reducing energy consumption to a target level by a certain year. So, the utility companies could be "hoarding" their increased income to provide for paying those penalties. Mostly the electric company is telling us to switch to gas or oil Not going to do much for the carbon credit thingy ... but if the elec company is successful, they won't need to build more plants because they will not have to produce as much electricity.

So, maybe the oil and gas companies will have to produce more of their product? But it looks like that won't be creating US jobs.

But PA will have two new govt buildings bearing the names of Specter and Murtha ... like the struggling budget needs two more govt buildings (that appear to be un-needed)to maintain?

[depittydawg]

Obama came into office thinking that he "being the chosen one" could somehow change how things were done in Washington. He bent over backwards trying to get bipartisan support for his agenda. Seems he's a slow learner...

I don't know how Clinton got into the conversation. I never mentioned him. I was talking about the composition of the "stimulus package." The point of the link I provided above was to show that the German government is actually "buying stuff" with their outlays.


http://topics.nytimes.com/top/refere...lus/index.html

Yea, I remember Obama's "tax relief". It amounted to about 13 dollars a week. Dumbest thing I ever heard of. Like giving workers and extra couple of bucks a week is going to stimulate anything. At least Bush was smart enough to pass out the HUGE tax relief to the middle class (600 dollars) in one check!
Here's the deal. Obama, and Bush prior to him, passed economic stimulus packages that failed. Why? Instead of getting the money into projects that would stimulate jobs and create demand from workers (consumers with money to spend), most of the "relief" went to wall street and state governments. The result is pretty simple. Most of it is still sitting there. Waiting to be invested. I agree with Buzz. The Germans Plan resembled an FDR or even Clinton stimulus. It actually created some demand by keeping consumers consuming, spent government money on much needed investments in energy and new industry development.

All that said, i still think the root of America's job losses is not economic cycles. It is a result of failing trade and tax policies. The middle class is taxed to much. The corporations don't pay squat for exporting their jobs and importing their products. And the Top half a percent don't pay enough.
Very few politicians are talking about remedies that might actually fix these problems. Certainly no one in leadership positions of either part.