Question:
Key arguments for and against the stimulus package?
2010-02-23 11:08:03 UTC
Im writing a paper for my International Busniess class and my topic covers the Stimulus package. Like the Q implies i am just looking for key arguments that are for and against the recovery act 2009. Dont need anything personal just an overview and any links would be great. Thanks
Six answers:
mtlmnr49
2010-02-23 11:43:37 UTC
Why do recessions happen? To clear out the bad investments accumulated during a boom. The economy cannot truly recover until those investments are cleaned out of the system. Government efforts to cut the liquidation short will prove to extend the duration of the process, not make it shorter. "Stimulus" is designed to prop up bad investments in the hope that the market will find a way to recover without letting the worst offenders fail. "Stimulus" money has to come from somewhere. Government redirects capital from productive uses into politically determined allocations. Government projects are easily seen, what is unseen is what would have been done with that productive capital had the government not directed it to political purposes.



Henry Hazlitt expounded on the seen vs unseen in Economics in One Lesson. Here is an excerpt from his chapter. He uses a bridge as an example:



"Two arguments are put forward for the bridge, one of which is mainly heard before it is built, the other of which is mainly heard after it has been completed. The first argument is that it will provide employment. It will provide, say, 500 jobs for a year. The implication is that these are jobs that would not otherwise have come into existence.



This is what is immediately seen. But if we have trained ourselves to look beyond immediate to secondary consequences, and beyond those who are directly benefited by a government project to others who are indirectly affected, a different picture presents itself. It is true that a particular group of bridgeworkers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $10 million the taxpayers will lose $10 million. They will have that much taken away from them which they would otherwise have spent on the things they needed most.



Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.



But then we come to the second argument. The bridge exists. It is, let us suppose, a beautiful and not an ugly bridge. It has come into being through the magic of government spending. Where would it have been if the obstructionists and the reactionaries had had their way? There would have been no bridge. The country would have been just that much poorer. Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the ungrown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others."



I've focused on the "against" side. The "for" side is readily available in the writings of Paul Krugman and others.
demaio
2016-10-29 07:37:47 UTC
you do no longer even care sufficient to earnings approximately those phrases and their actual definitions, nor do you seem to comprehend something approximately economics, so why feign such project for "assisting the voters"? Conservatives are against government stimulus programs, no count number if a Republican or a Democrat help them, via fact they are an phantasm. the very comparable mechanisms that brought about the financial issues are wrapped up in those stimulus programs. the government is going to print a gaggle extra funds and launder it with the aid of their so called jobs they convey and someplace else, and that they blend it in with taxpayer funds, actual funds to pay off the banks and different failed agencies, then the debt and inflation that ensues would be positioned directly to the taxpayers, you and your babies, etc etc. What might you assert on your investor if he advised you to place you funds right into a failed employer? See, the pretend funds the government will create will create an inflationary growth, and human beings will pass, Oh, see, Obama is so great, yet who would be blamed for the INEVITABLE recession that happens from this sort of habit? basically inner maximum voters can create actual value, the government can basically create imaginary value. Now do tax cuts, and that i propose considerable tax cuts make sense? it particularly is approximately lowering the debt on the taxpayer at the same time as additionally ward off putting extra on their backs.
?
2010-02-23 11:11:43 UTC
THINK OF IT THIS WAY... A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year. A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year. The average Cash for Clunkers transaction will actually reduce US gasoline consumption by 320 gallons per year/vehicle. They claim 700,000 vehicles, so that's 224 million gallons saved per year.

That equates to a bit over 5.3 million barrels of oil.

More importantly, 5.3 million barrels of oil at $70 per barrel costs about $350 million dollars.

So, the government paid $3 billion of our tax dollars to save $350 million.

We spent $8.57 for every dollar saved.



I'm pretty sure they will do a great job with health care though



Sorry - cannot come up with something good about the stimulus plan.
srm4hvk29
2010-02-23 11:46:45 UTC
My main argument is that we are trillions in debt. We do not have the money that was spent. Obama doesn't have the right to give corrupt Executives money we don't have. Technically he can since he is the president, but you can't spend your way to a better economy.
?
2010-02-23 11:18:26 UTC
Simply..probably over simply put, how can we continue to pay out funds when there are none left? We are so far in debt we will never get out. Its a false sense of security and puts a band aid on a bullet wound.
Sweetdaddy Rex
2010-02-23 11:13:20 UTC
GENERALLY, that,that is given freely, is usually very expensive in the long-run !


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