Does stimulus create any real long-term employment?

[Mike32ct]

I see quite of threads on economics here. In the US, the left is pushing (more) stimulus and the right is resisting. I tend to side more with the right.

My question is does stimulus spending create any long-term employment?

I'm not an economist, but I would guess no. Even these so-called "shovel ready" projects will keep contractors going for a few months, maybe a year maximum. They will simply increase the hours of their existing workers or maybe bring in temporary help. I don't see how many permanent positions would be created.

Even other "stimulus" like unemployment checks, payroll tax cuts, etc. won't provide steady enough growth for businesses to consider new permanent hires.

Any thoughts?

 

[n00bPimp]

You're right, by itself it does not provide economic growth. The better question is does stimulus motivate businesses and consumers to increase spending. The answer to that is a little more debatable, but i would say it is also ineffective at this. The only "good" thing that stimulus provides is it maintains the status quo. It provides stability to producers during extreme economic downturns. This way, producers are kept stable and at the ready for the eventual recovery. Its like keeping an accident victim on life support. Except capitalism never dies. So how can you go wrong?

 

[Bible_Belt]

"Stimulus" means a lot of different things. Infrastructure improvements are one form of stimulus that I think do improve the economy.

For example, I can't get a lot of work-from-home jobs because I do not have access to high-speed Internet in the rural location where I live. If broadband coverage expanded, I could get such a job and start paying more taxes. Businesses use infrastructure to employ people. As another example, iif we didn't have interstate highways, many of which now need repair, then it would be much harder to run a trucking company. Infrastructure fosters business, which creates an economy.

 

[Drdeee]

All that stimulus talk is for printing more money, and that in turn gets United States into more debt. Your money in turn worth less. Q: what's better more money that have less buying power or less money that have more buying power. Stimulus by printing money is how your government robs you.

I like what Ron Paul is saying, stimulus OK but only if deficit is created somewhere. That is new money is not printed, instead it's taken out of programs like Afghanistan, Iraq, and other useless wars.

Vote Ron Paul, and remember rick perry is a globalist banker douche that is imitating Ron Paul on words, in action he's same as other choices global banksters presented you in this upcoming free election - free to choose one of their candidates. Time to wise up people and take the power back.

 

[joverby]

LOL! Do you know a third of the stimulus went to foreign banks/corporations?

This fact is from Ron Paul btw

 

[ElChoclo]

I like it when your economy gets a stimulus. It keeps my South Pacific Peso high as a result of the diluted value of your North American peso (thats your US dollar in case its unclear).

Anyway thanks for the help, I was thinking of buying some of your manufactured goods.

I think Ron Paul has some valid points, but he is telling you "unconventional truths" which you don't want to hear. Besides he is not good looking, a bit too old, and has an odd delivery when giving talks. Rick Perry though looks good in a suit. So if you could somehow make Ron Paul look like Perry or better still Michelle Bachman.

 

[5string]

Stimulus is necessary. Have a look at some recent interviews by Robert Shiller. We can boost the economy without raising debt but we do have to raise taxes. Economically this is the only feasible option, unfortunately political strategists would suggest otherwise for obvious reasons.

One thing has been confirmed though. You can't deleverage yourself out of recession. Japan suffered from over ten years of lost growth and deflation (which hasn't been alleviated) because of their rigorous attempt to reduce their debt. When the Asian crisis peaked in 1998 the central bank had no flexibility since interest rates were already at near zero (a position the Fed is looking dangerous close to)

If the US tries to reduce its debt too quickly, as most Republicans are advocating and the western world falls into a double dip recession (some argue we're already there) then the US will be in a very precarious position.

Wrong.

Less government control and regulation is part of the answer. Let the free market society produce and create jobs without government intervention.

Raise taxes? Wrong again. Less spending is the answer on this one. It's out of control in this society which is now moving even closer to pure socialism. If you take money away from those who create jobs, they will not have the resources to hire workers.

Economically, the only feasable option is to cut social and other programs and quit taxing the ratfvck out of the very folks and businesses who create the jobs this economy so desperately needs.

 

[Mr.Positive]

Again, when you have a "fiat" debt system where you lend 10 for 11 when only 10 exist.....your debt compounding will catch up every time and sink your economy. This is a mathematical certainty and any shifting of money around is merely shifting deck chairs on the titanic.

Consider this, in the history of mankind, there has been over 3400 fiat currency systems and every single one of them has failed.

The average lifespan of a fiat system is 30-50 years. As our average age is 70 years or so, fiats grow old and die too. That's how they are designed.

As of last month, the US Dollar has been a fiat currency for 40 years. We have lost 98.8% of our purchasing power in that time. How much longer until we lose the last 1.2%?

 

[element1286]

Stimulus is necessary. Have a look at some recent interviews by Robert Shiller. We can boost the economy without raising debt but we do have to raise taxes. Economically this is the only feasible option, unfortunately political strategists would suggest otherwise for obvious reasons.

One thing has been confirmed though. You can't deleverage yourself out of recession. Japan suffered from over ten years of lost growth and deflation (which hasn't been alleviated) because of their rigorous attempt to reduce their debt. When the Asian crisis peaked in 1998 the central bank had no flexibility since interest rates were already at near zero (a position the Fed is looking dangerous close to)

If the US tries to reduce its debt too quickly, as most Republicans are advocating and the western world falls into a double dip recession (some argue we're already there) then the US will be in a very precarious position.

You may be right, but all these stimulus are doing is delaying the inevitable. If the government could actually solve a problem instead of pushing it off we wouldn't be in this situation now. I support a stimulus in the short run, if it means radically reducing the amount of spending the government does in the future, and radically changing the ways the government collects revenue.

 

[sstype]

Wrong.

Raise taxes? Wrong again. Less spending is the answer on this one. It's out of control in this society which is now moving even closer to pure socialism. If you take money away from those who create jobs, they will not have the resources to hire workers.

Please tell me how much more wealth need to concentrate at the top before the rich will start hiring again.

Currently the top 20% own about 90% of America's wealth......where are the jobs?

Source:

Who Rules America:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

[5string]

How predictable. I love how free market zealots assume that the private sector will magically rise up to account for any reduction in public spending, when there are very few respectable case studies that support this and no you’re Granddad’s nostalgia about the good old days when ‘people used to work for a living instead of accepting government handouts’ doesn’t count. Laissez Faire economics has been proven repeatedly to yield greater levels of inequality, productivity and welfare than systems which balance free market economics with healthy amounts of government intervention.

Less regulation is no panacea to our problems given lax financial regulation was arguably the largest factor in the systemic financial meltdown that we’ll be suffering from for generations (predatory lending, unnecessarily complex synthetic financial instruments, blatant, legally front running the Fed at the expense of the taxpayer, etc).

If we lived in a truly free market society then I’d agree but this ain’t no Smithian Utopia. Wake up and smell the coffee: Its crony capitalism at best and a plutocracy if you’re a realist.



Sigh…….I need no longer continue with this conversation.




The assumption being that any wealth ‘generated’ by the rich will be invested or consumed. Lower income groups have a higher marginal propensity to consume so from an economic point of view redistribution will lead to a |C+I| greater than what would occur without it.

The largest 25 companies in the US are sitting on over $500bn of excess capital. They see no reason to invest because consumption is so lethargic and yet by your logic this money should have already been allocated to productive areas of the economy. A case of the chicken before the egg I think.

A zealot huh? Pot calling the kettle black me thinks. You are 22 yrs old and have probably been educated by our leftist dominated academic institutions. You believe what you have been taught, blindly. When you grow up and spend some time in the real world, paying your taxes and working your a$$ off for the benefit of others, you'll understand. Not to say that when help is needed, it should be provided because it's the right thing to do. That is our responsibility as a society.

Do you really want an inept government running your life? You are your own man I suspect. Make your way through life on your own accord without intervention by folks who think they know what is best for you rather than you yourself.

Sorry. We simply disagree.

 

[joverby]

A zealot huh? Pot calling the kettle black me thinks. You are 22 yrs old and have probably been educated by our leftist dominated academic institutions. You believe what you have been taught, blindly. When you grow up and spend some time in the real world, paying your taxes and working your a$$ off for the benefit of others, you'll understand.

Like how we "bailed out" multinational banks with trillions of dollars that we just printed off, further inflating our economy? Welcome to belonging to a SOCIETY. This is part of a society. Go be your own sovereign nation if you don't want to do that.

There's balances, you don't need one extreme or another. But people ALL need to pay their fair share in taxes and we need to stop pissing away trillions on wars that are just making private contractors / haliburton / mercinaries rich, oh and the oil execs.

Also, that great leftist school system you love to bash is purposefully underfunding and our education system as a whole is flawed. Compare it to Norways once(who gets 3rd in international tests) where the average salary for teachers is 60K and they have more control over what is taught. There is also the same teacher for kids K-5. That way the teacher learns the quirks / learning habits of each child and knows how to teach them better than anyone else. Our teachers in the U.S. are merley shells that dish out a pre-formatted lesson. Our academic scores reflect that.

The only way to be educated on the "right" side would be to be rich enough to go to a good to decent private school. Which most people can't afford that luxury.

Your leftist bashing is a testament to your ignorance. Anyone who is truly open minded in this aspect wouldn't do such. I used to be the same way. Our country wouldn't be in this sh1tt situation if people weren't so easily manipulated and followed parties blindy.

Look at Ron Paul. He is a Republican technically but draws support from people of all parties. Why? Because once you get to know his platform. IT DOESNT MATTER. It never matters. What matters are his positions on important pressing issues. The party system is just used to heard the cattle more efficently.

Moo.

 

[5string]

Like how we "bailed out" multinational banks with trillions of dollars that we just printed off, further inflating our economy? Welcome to belonging to a SOCIETY. This is part of a society. Go be your own sovereign nation if you don't want to do that.

There's balances, you don't need one extreme or another. But people ALL need to pay their fair share in taxes and we need to stop pissing away trillions on wars that are just making private contractors / haliburton / mercinaries rich, oh and the oil execs.

Also, that great leftist school system you love to bash is purposefully underfunding and our education system as a whole is flawed. Compare it to Norways once(who gets 3rd in international tests) where the average salary for teachers is 60K and they have more control over what is taught. There is also the same teacher for kids K-5. That way the teacher learns the quirks / learning habits of each child and knows how to teach them better than anyone else. Our teachers in the U.S. are merley shells that dish out a pre-formatted lesson. Our academic scores reflect that.

The only way to be educated on the "right" side would be to be rich enough to go to a good to decent private school. Which most people can't afford that luxury.

Your leftist bashing is a testament to your ignorance. Anyone who is truly open minded in this aspect wouldn't do such. I used to be the same way. Our country wouldn't be in this sh1tt situation if people weren't so easily manipulated and followed parties blindy.

Look at Ron Paul. He is a Republican technically but draws support from people of all parties. Why? Because once you get to know his platform. IT DOESNT MATTER. It never matters. What matters are his positions on important pressing issues. The party system is just used to heard the cattle more efficently.

Moo.

Well joverby, despite the fact you called me ignorant, I actually agree with nearly everything you said above.

You have my greatest admiration and I respect your beliefs.

 

[Gaucho]

The main structural problem here is the US trade deficit. There needs to be investment in 'sunrise' industries, whereby the US can gain and use a competitive advantage in trade. Until then, USD devaluation particularly against the CNY is not going to solve a structural problem when the Chinese won't themselves increase domestic consumption given once more, for them to do so, will require a complete shift in culture. Even if they do, they won't necissarily consume from the US. A budget balance is also useless if the private sector and general public continue to consume more than the country can produce. It's very simple logic really.

Not to mention there needs to be encouragement for the 'brains' to move into science and research and development rather than financial markets. This is one massive fault of capitalism.

Finally, citizens need to stop complaining about their Government, it is the Governments of the past that caused this mess and the people for not demanding differently. Years of past excess must now be repaid. QE can only aid in bringing down long-end yields and encouraging investment and consumption, it cannot solve structural problems.

 

[Burroughs]

Wake up and smell the coffee: Its crony capitalism at best and a plutocracy if you’re a realist.

Correct

looks like things are getting choppy

http://finance.yahoo.com/news/Stock-futures-signal-losses-rb-2202844104.html