Stimulus doesn't work, but tax breaks for the rich do?

[KoihimeNakamura]

Incidently, you can still get cheap cars. Turns out I was wrong about used car prices.

 

[drkitten]

At one level, scary amounts, at another level prudent amounts.

"Paradox of thrift."

You're waiting for sales to pick up, just like everyone else.

The problem is that everyone's waiting and too few people are actually buying, hence need for the stimulus.

 

[Tippit]

"Paradox of thrift."

You're waiting for sales to pick up, just like everyone else.

The problem is that everyone's waiting and too few people are actually buying, hence need for the stimulus.

No, the problem is that people are either out of a job, in debt up to their eyeballs, or both. Since they can't counterfeit money, tax everyone else, or borrow from foreign central banks like governments can, they need to deleverage, which means less money for consumer goods. Or, they simply don't have any money to spend.

 

[drkitten]

No, the problem is that people are either out of a job, in debt up to their eyeballs, or both.

Actually,.... no. (Wrong as usual.) Most people are still employed (the unemployment rate is only about 10% -- even if you double that to account for the discouraged, four out of five people still have jobs), and the median household debt is a quite manageable 18% or so, below the average for the 2000s -- and has actually decreased since the start of the recession.

The problem is not that people don't have money. The problem is that people don't feel secure about having money. It's not that people don't have jobs, but that they're worried they won't have jobs next month, so they're acting to preserve their savings.

Don't you ever get tired of being wrong with every sentence you type?

 

[Dorian Gray]

I'm not sure what you expect me to say about your lies and irrelevancies.

Nothing, and as soon as I say something that fits in that category, feel free to shut up. However, CfC was taking money from people and using it in a way not everyone agrees with. Taxes are taking money from people and using it in a way not everyone agrees with. Therefore, they are the same thing - using money paid by the taxpayer in a way not everyone agrees with. And therefore, if you don't like CfC, you don't like taxes, and your argument must apply to that too.

Keep on wishing, though. Your mom will probably feel sorry for you and at least tell you she believes you.

I suppose if you believe that the “Cash for Clunkers” scam was good for the economy, then perhaps you also believe that the 9/11 attacks were also good, for the same reason—that huge amounts of valuable assets were destroyed, creating the opportunity for economic activity to replace them. From that point of view, then I suppose you would see it as incredibly wasteful to spend money on military activities to prevent many, many more 9/11-type attacks.

I'm not sure what you expect me to say about your lies and irrelevancies.

 

[Emperor_Gestahl]

Actually,.... no. (Wrong as usual.) Most people are still employed (the unemployment rate is only about 10% -- even if you double that to account for the discouraged, four out of five people still have jobs), and the median household debt is a quite manageable 18% or so, below the average for the 2000s -- and has actually decreased since the start of the recession.

I'd take issue with a comparison of household debt with "the 2000s", as these were bubble years. Debts were irrational then because the market was irrationally assuming eternally rising property values. In such an imaginary environment income is irrelevant as merely having your claws in the property means you will be the winner. That wasn't true, but it was the backdrop of those debt levels. The levels were directly related to the price of the houses the debt was incurred for, which were too high (and of course the loans were written in absence of sufficient income to begin with).

Yeah it's decreased since the recession began, like gasoline decreases starting at the point it's set on fire. Even people who thought you ought to have had less gasoline around are not pleased by this development. At issue is not the maintenance or lack thereof of the status quo, it's the sanity of the status quo in the first place.

 

[Delscottio]

Further, those of us who were in the market to buy a used car, but not in a position to be able to afford to buy a new car even with the help of this scam, were further harmed, because the supply of used cars has been diminished, and their price, as a result, increased.

So what you're really saying is that the wealth wasn't destroyed mearly transfered due to the lack of supply as you'd expect with any asset. The rolling stock on the road now has increased in price. It would be interesting to see how much the average price increase is and how many 2nd hand vechiles there are to see if wealth has actually been created.


Come on Bob lets get this out in the open, you're not bothered about wealth destruction/ creation, the car makers jobs, the suppliers jobs, the grocery store jobs who feed the aforementioned etc what really pisses you off is others have dared to benefit from tax dollars while your savings pot for that new car suddenly isn't enough. Me me me is all I hear when reading your posts - the fact that the Cfc money may well have helped keep you in a job (indirectly) or a family member etc means nothing - you haven't directly benefited and it gets to you. It remeinds me of alot of the UHC arguments, but don't worry we have a whole political party over here with the same attitude so you're not alone.

 

[Malerin]

Actually,.... no. (Wrong as usual.) Most people are still employed (the unemployment rate is only about 10% -- even if you double that to account for the discouraged, four out of five people still have jobs), and the median household debt is a quite manageable 18% or so, below the average for the 2000s -- and has actually decreased since the start of the recession.

The problem is not that people don't have money. The problem is that people don't feel secure about having money. It's not that people don't have jobs, but that they're worried they won't have jobs next month, so they're acting to preserve their savings.

Don't you ever get tired of being wrong with every sentence you type?

Household net worth peaked in 2007 at roughly $64.2 trillion. As home values fell and the stock market tanked, net worth fell to a low of $48.8 trillion in early 2009—a staggering 24 percent decline in just two years. It drifted upward for a while but in the latest quarter fell back to $53.5 trillion. From the peak of 2007, that amounts to about $100,000 in lost wealth per U.S. household.
http://money.usnews.com/money/blogs/flowchart/2010/9/17/how-consumers-lost-a-fast-15-trillion.html

But what's a few trillion dollars? People have plenty of money.

My school district, for example, is laying off two more teachers, cause we have so much money!

 

[drkitten]

Household net worth peaked in 2007 at roughly $64.2 trillion. As home values fell and the stock market tanked, net worth fell to a low of $48.8 trillion in early 2009—a staggering 24 percent decline in just two years. It drifted upward for a while but in the latest quarter fell back to $53.5 trillion. From the peak of 2007, that amounts to about $100,000 in lost wealth per U.S. household.
http://money.usnews.com/money/blogs/flowchart/2010/9/17/how-consumers-lost-a-fast-15-trillion.html

But what's a few trillion dollars? People have plenty of money.

You don't think that $53.5 trillion dollars is a lot of money?

 

[KoihimeNakamura]

Household net worth peaked in 2007 at roughly $64.2 trillion. As home values fell and the stock market tanked, net worth fell to a low of $48.8 trillion in early 2009—a staggering 24 percent decline in just two years. It drifted upward for a while but in the latest quarter fell back to $53.5 trillion. From the peak of 2007, that amounts to about $100,000 in lost wealth per U.S. household.
http://money.usnews.com/money/blogs/flowchart/2010/9/17/how-consumers-lost-a-fast-15-trillion.html

But what's a few trillion dollars? People have plenty of money.

My school district, for example, is laying off two more teachers, cause we have so much money!

Strawman.

 

[drkitten]

Strawman.

Not a straw man, just a complete lack of proportion. And one that actually proves my point.

The school district, for example, is laying off "two more teachers."

The Ames, IA school district has 324 teachers on its payroll -- losing two would be a loss of six tenths of a percent of the staff; in other words, 99.4% of the teachers in that district would still have jobs, but 100% of those 99.4% would be scared about losing their jobs and start cutting back on spending.

Why Ames? I just kind of pulled it out of a hat. There's nothing special about that particular district; it's an ordinary small-town district like thousands of others across the country. (Ames has a population of 50,000, so it's quite the small town.)

The odds are actually quite good that Malerin lives in a city and a school district much larger than Ames, in which case a loss of two teachers is even smaller. But even a hamlet like Bath, PA (population less than 3,000) still has a teaching staff of 89 teachers.

 

[KoihimeNakamura]

I suppose that makes sense. I know I'm rather nervous about taking a loan out evne though I sorta have to.

 

[Bob Blaylock]

So what you're really saying is that the wealth wasn't destroyed mearly transfered due to the lack of supply as you'd expect with any asset.

No, I did not say any such thing. I did not say anything that any sane, honest, or rational person would interpret that way. Nor did I say anything that supports any of the other things you have absurdly attributed to me.

 

[oggiesnr]

To approach the OP from the other end...

What proof is there that tax cuts for the rich would have had any effect on the reccession? As I recall we seem to have had decades of "trickle down" but we still ended up here.

Steve

 

[Malerin]

You don't think that $53.5 trillion dollars is a lot of money?

Appparently not.

As Tippit points out, when households lose approx. 20% of their net worth in a year (when the savings rate was already almost non-existent), and unemployment more than doubles in that same time period, well a little devleraging is to be expected.

But during the depression, 75% of the population was working, so what was the problem?

 

[drkitten]

Appparently not.

As Tippit points out, when households lose approx. 20% of their net worth in a year (when the savings rate was already almost non-existent), and unemployment more than doubles in that same time period, well a little devleraging is to be expected.

But during the depression, 75% of the population was working, so what was the problem?

Already asked and answered. The (major) problem wasn't the 25% of the population that wasn't working -- it was the 75% of the population that was working and largely pulling its wages out of circulation instead of re-spending them. (Of course, there were other structural issues as well; people couldn't even save with safety with banks failing and people outright losing savings, which made the economically unproductive "cookie jar" a reasonable investment. This particular problem has since been fixed with the FDIC.)

To understand why this is so, just go back to those two laid-off teachers in Ames, IA. If just 150 of the remaining 300+ teachers realize that their jobs are at risk and cut their household spending by 5%, that will do several times more damage to the local economy than the loss of two jobs. (The 150 teachers cutting their spending will pull about seven and a half jobs worth of money out of the local economy; two unemployed teachers will of course cost two jobs.) If the local fire department, police department, and hospital staff also see the layoffs and start cutting back on their personal household expenses, it only gets worse.....

 

[Delscottio]

No, I did not say any such thing. I did not say anything that any sane, honest, or rational person would interpret that way. Nor did I say anything that supports any of the other things you have absurdly attributed to me.

Eh you said the remaining cars had increased in price as a result? So what did you mean?

 

[A Christian Sceptic]

(Of course, there were other structural issues as well; people couldn't even save with safety with banks failing and people outright losing savings, which made the economically unproductive "cookie jar" a reasonable investment. This particular problem has since been fixed with the FDIC.)

Isn't the FDIC bankrupt?

 

[drkitten]

Isn't the FDIC bankrupt?

No more so than the Transportation Department.

 

[A Christian Sceptic]

No more so than the Transportation Department.

Is the Transportation Department bankrupt?