In response to:

It's the Spending, Stupid!

Daddio7 Wrote: Dec 19, 2012 7:25 AM
I hate to say Robert Reich is right about something but sometimes the government is the spender of last resort. In a recession no one is borrowing so any money the government borrows was just gong to sit there doing nothing. Of course they have gone way to far and guess who caused the recession in the first place.
bearcub Wrote: Dec 31, 2012 4:03 AM
not correct. money does not sit. it travels - to china and elsewhere.
Texas Chris Wrote: Dec 19, 2012 9:25 AM
Government borrowing and spending cannot generate a healthy economy. Eventually the government must cease it's "investment", at which point the bubble bursts, and we have a recession.
FletchforFreedom Wrote: Dec 19, 2012 9:05 AM
Except of course, Robert Reich is not right and the Keynesian notion that government spending stimulates the economy is contrary only to ... all of history.
bearcub Wrote: Dec 31, 2012 4:16 AM
cutting taxes is spending. anything you do to decrease amount of money you have is spending. decrease your income - i.e. taxes = spending. cutting taxes IS keynesian - you need to re read your keynes if you have never read it read it! being informed makes for better debate and better solutions for our nation!
Illbay Wrote: Dec 19, 2012 8:53 AM
This is a stupid, stupid, stupid observation - and appeals to Robert Reich just compound the stupidity.

The government's spending is the primary REASON that no one borrows - they suck all the air out of the room and leave everyone gasping. So politicians create the problem they then announce THEY must fix. And the clueless - like you - never catch on.

Which is why we have Obama for four more years.
Texas Chris Wrote: Dec 19, 2012 9:26 AM
Which is why we have the FED. No sane, informed person would endorse a central bank.
bearcub Wrote: Dec 31, 2012 4:10 AM
actaull lllbay you could not be more wrong, or misinformed. Borrowing was at all time high because banks benefitted from loaning money to more and more people. then banks crashed - because they created assets that had no value and eventually this became known. After that banks did not want to loan money. Govt does not control banking, to some extent banking controls govt. you don't understand the reality very much - try to learn about it - it is interesting!
bearcub Wrote: Dec 31, 2012 4:13 AM
another factor for low borrowing rates outside of the banks (which the govt has done all it can to allow for more borrowing but that is changing slowly) is that corporations have enjoyed RECORD profits over the last 4 years and great profits over the last 10-20. they don't need to borrow money - and they don't want to spend money right now. why is this? because they can earn more by investing their money in financial instruments - i.e. loaning to the banks (corps loaned TO the banks leading up to the crisis not the other way around) and not by increased production of the goods they actually make - demand is low, the middle class is less wealthy each year starting in 1980s they have stopped improvement in standerd of living, wages down as
bearcub Wrote: Dec 31, 2012 4:14 AM
labor unions nearly eliminated - 95% of wealth increase only in top 1% who doesn't need to buy stuff and invests their money in capital markets - i.e. money buying money not stuff - this does not create jobs, and so the cycle continues. lack of borrowing is NOT the issue - read, learn it is fun!
MadisonWannabe Wrote: Dec 19, 2012 8:36 AM
Another reason that money just sits there is that if you borrow to invest in a product or company that fails, you lose that money. If it is successful you are denounced as greedy and the money taxed away anyhow. What is the incentive? Money sits in your safely in your own pocket until things stabilize and it is worth taking a chance.
bearcub Wrote: Dec 31, 2012 4:04 AM
not true - look at where money is placed. NOBODY - I promise you no corp at all - not a single one - sits on their money. you do not understand how capitalism works - if you sit on your money for even a day or an hour you are doomed - ALL MONEY is doing work by itself - it is ALL invested all the time - you need to learn about financial sector!!!!!!
bearcub Wrote: Dec 31, 2012 4:07 AM
the problem for last 10-20 years is that profits from investing in financial products far better than return on inv in MAKING anything - i.e. non financial products - when the top 1-2 % place their money in financial markets this does not lead to job growth or growth to econ, it DOES lead to unprecedented corp profits - the profit rates of corp has been at all time high - that doesn't occur by putting money under mattress I promise you sir.
Matt in N.C. Wrote: Dec 19, 2012 7:59 AM
The main reasons that money sits: (1) low interest rates mandated by the government, (2) economic downturns caused by foolish government policies, (3) uncertainty about what the next foolish policies will be, and (4) certainty that government will tax that money more if it's put to more productive use.
Listening to progressive media pundits, I'd think the most evil man in the universe is Grover Norquist, head of Americans for Tax Reform. His crime? He heads a movement that asks political candidates to pledge not to raise taxes.

I think Grover accomplished a lot. But I wish he'd convinced politicians to pledge not to increase spending.

President Obama says raising taxes to cut the deficit is a "balanced" approach.

Balanced ...

But what's "balanced" about raising taxes after vast increases in spending? Trillions for war, Medicare, "stimulus" and solar panels. Tax receipts rose -- after tax-rate cuts -- from $1.9...