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View Diary: Obama: Extend middle-class tax cuts, forget borrowing for the rich (414 comments)

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  •  Spending money doesn't pay down deficits (0+ / 0-)

    It just exacerbates them.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Sat Nov 06, 2010 at 09:12:32 AM PDT

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    •  Tax cuts to the rich don't either (1+ / 0-)
      Recommended by:
      magnetics

      they inflate it, especially when they use the extra cash to open up factories in places like Mexico and East Asia, further increasing our trade deficits.

    •  not true (1+ / 0-)
      Recommended by:
      missississy

      Confused by your comment. Are you saying that an improving economy will have no impact on deficits ?

      This is why you want an expanding economy. For it to be successful, government spending has to stay the same or decrease.

      The problem that occurred in 2008-2010 (now almost 2011), that in order to dampen the effects of the recession, the federal government spent unprecedented amounts to keep people working (and covered those not working with unemployment assistance), while only receiving a portion of that income back in federal taxes-- which of course, worsens the deficit (gap between revenue and expenses ) and overall debt. That was the lose-lose choice the Democrats had to make--either attempt to assist,  or worsen the economy by not assisting, and thus allowing more people to be laid off as the entire economy collapsed. (The latter was the policy of the Hoover administration in 1928 that believed in a laissez faire policy--that the economy could take care of itself.) Finally, it was a lose-lose-lose proposition--lose the entire Congress if the economy got worse.

      Interestingly, monetary policy, whereby the Fed controls a recession via the money supply (lowering interest rates, lowering the reserve requirements of banks so that they can loan more, and/or buying up US Treasury bonds (securities) has had virtually no effect on the recession. We are at record lows in interest rates and nothing has happened with corporations to expand to create jobs.

      There is no quick fix, no campaign slogan, no magic wand to create an expanding economy at this point.  There needs to be a point where corporations decide that they can no longer sit on their hands and not expand (which they will) in order to be providing the profits desired by shareholders.

      It's like a teeter totter--really. Just keeping a balance.

      •  Re (0+ / 0-)

        Are you saying that an improving economy will have no impact on deficits ?

        Depends what you mean by "improving economy". An economy dependent on government spending will look "good" but will only rely on massive deficits to survive and will evaporate when they go away.

        If the government creates a WPA for example, sure that will make a "better economy", which depends on increasing debt. When the debt has to paid back the economy will suck more than the original benefit was.

        So you have to be very careful when you talk about what a "good economy" is.

        There is no quick fix, no campaign slogan, no magic wand to create an expanding economy at this point.  There needs to be a point where corporations decide that they can no longer sit on their hands and not expand (which they will) in order to be providing the profits desired by shareholders.

        I believe it is somewhat likely that we never will have anything construed as a robustly expanding domestic American economy ever again, at least in the working lifetime of those reading this.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Sat Nov 06, 2010 at 02:00:05 PM PDT

        [ Parent ]

    •  Spending money on the interstate highway system (2+ / 0-)
      Recommended by:
      snackdoodle, missississy

      Created a radical new America and drove economic growth for decades.
      Now we have worn out the infrastructure that we built to get out of the Great Depression and to put people to work after WWII.
      We need more rail, more bus lines more broadband internet, much more electrical grid to connect to the wind farms, etc.
      We are about to start a revolution in architecture and city planning around energy efficiency and conservation.
      Even without hydro-fracking we will continue to rely on natural gas which is much cleaner and has a much smaller "carbon footprint" per btu than oil or coal and of which we have large domestic reserves.
      Most of this will require minimal "gov. spending", mostly it needs a level playing field to compete with oil/coal.
      This is where all the jobs are, middle class/working class/non-exportable/private sector jobs.
      This last election was a massive effort by big oil/big coal to turn back the clock and resist the inevitable. Most of the issues that got debated in this election were not even pimples on big oil's butt.

      •  Great ideas! (0+ / 0-)

        And not everything has to be nationwide in scale.  I've been hearing that a lot of green jobs can be created by people retrofitting existing houses, buildings, and infrastructure.  Nothing would require a huge outlay in itself.  We do need, however, to OWN the skills and technology needed to make this happen.

      •  Infrastructure projects are a long term (2+ / 0-)
        Recommended by:
        magnetics, NoGW

        investment in the economy, which can and HAS been shown to stimulate and grow the economy, which can also reduce deficit if done correctly. Unfortunately far too many people don't look that far ahead. Many don't look past yesterday.

        •  Thank you! (0+ / 0-)

          For saying "Investment" instead of "Spending". Investments, whether government or private, should be designed to be smart - improving the capacity and the efficiency of the economy, thereby repaying more than they cost. What sorts of investments qualify?

          Good education - needed for a competitive workforce.

          Good healthcare - ditto

          More efficient transportation and buildings - to reduce costly energy usage, pollution and supply line protection (think global military requirements).

          Feel free to add your own examples...

          Corporations exist to benefit shareholders. Governments should exist to benefit citizens.

          by NoGW on Sat Nov 06, 2010 at 10:46:14 PM PDT

          [ Parent ]

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