One thing is now absolutely clear:

This is now Obama’s Economy, for good, bad, or indifferent.

Feels a lot like 1977 to me.

Temporary yes…it’s a stopgap measure intended to prime the private sector pump and cushion the recessionary blow. The ideal stimulus to my mind would have been a massive infrastructure program which hired lots of people and bought lots of stuff. That said, because this recession is coupled with a credit contraction and deleveraging to a degree not seen in our lifetime, there’s no question that any government effort to stimulate the economy is not going to be as effective as the textbooks and experience expect.

like it or not, this is barrys economy. as it was bushs. and willys. and bushs.

Things will be even better after everyone has free health care.

I take it all back 2hotel9. The statements like “The economy under Carter was something bush of 2008 would love to have had.” just made my day. I especially love the call to read the history from an ignoramus that the other day claimed that it was conservatives like people who build the berlin wall.

hey berlin wall boy, do you know what a misery index is? I know I know it’s expecting too much of you… but anyway, here is the stellar rating that Carter had? Oh fantastic economy! Amazing!

you see what I mean gents? the fish is dead, but it reeks deliciously.

Yep, you can’t take in $5 and spend $100 and expect anything other than this Democrat engineered economic collapse. A collapse that dinothefakehomo has repeatedly told us he wants, along with rounding up Americans, putting them in camps and “eliminating” them.

Growth in govt spending is not economic growth, con. We have yet to pay the bill. Study up on double-entry bookkeeping. This is just another subsidy bubble.

“There is stimulus if the government spends money while individuals and the corporate sector do not…how else to explain the rise in GDP…”

Again, taking money from the productive taxpayers and using it for political payoffs yields no positive growth; nothing is created. The GDP number is from growth of govt, which produces nothing. It is another subsidy bubble, like Cash for Clunkers.

The private sector, which pays for everything, is shrinking.

The problem is that everybody doesn’t know the truth; they are listening to Obama’s lies, and they want to believe, while the economy goes down the toilet.

I would like your take on this one, Mike: Not long ago, Obama claimed that healthcare costs caused the recession. Now, healthcare costs are the same, but he’s claiming the recession is over. Do you think he will retract his earlier statement, in light of his new claim? If not, why not?

BTW, I strongly disagree that “it had to be done”. Harming the economy through massive debt creation is never a good thing. FDR’s “New Deal” proved that.

It’s not a statement of fact, it’s false. There is nothing Obama has done that deserves any credit.

“Obama could kiss a baby and you declare he is a pedophile.”

You’re just making that up.

dinothefakehomo spews the same lies and fictionalized “history”, Mongol, its all he has.

There is stimulus if the government spends money while individuals and the corporate sector do not…how else to explain the rise in GDP, especially if it turns out to be a one or two quarter blip as I expect. Whether stimulus is a good thing in the long run will only be known in the long run although stimulus spending while in a budgetary deficit position is not a good situation, all things being equal. All things aren’t equal this time around and so I know it had to be done although it could certainly have been done more effectively IMO. I agree that it’s “phony” growth and that the recovery won’t truly begin until the private sector begins to reinvest but then everybody knows that.

a bigger question is how was it determined that growth was “stimulus-driven”? Would they by chance use the same fancy math as when they calculated the 30k… no wait 25k jobs they created? You know when they counted some jobs as many as four times? Now someone remind me how many billions of taxpayers $$$ was spent to “create” the 25k jobs?
But hey should we really be surprised by this? Remember when we were told by the WH that the crisis was easing up because the GOOGLE number of “crisis” hits was going down.

“Get tax rates back to where they were pre-reagan for starters.”
because Carter’s economy rocked… aha now it makes complete sense!
I tell you gents, it’s like shooting fish in a barrel. Except in this case the fish is already dead and not moving. BORING!

You carry on as though government spending, and not private economic activity, were the engine that drives the overall economy.

Sorry if that is what’s coming across because private economic activity is definitely the driver of economic growth. What I’m saying is that if government could resist the temptation to spend freely when economic times are good then it would enjoy more flexibility to stimulate in the economic down times when such spending is most needed. That’s a big “if” of course because politicians and the bureaucracy aren’t noted for their long term thinking. My points here are a response to the positions that stimulus is never warranted, that it never works, that the current economic climate would somehow be more positive if the government hadn’t stimulated and that the positive GDP print was the result of anything other than the stimulus. My opinion is that the GDP will again decline once the effects of the stimulus have worn off because the private sector is too weak to sustain the gains. I agree that we’re talking about matters of degree but we’re also talking about matters of what needs to be done and what is possible to do…advancing the position, as some here are, that government should just get out and stay out of the economy is fine but what are the real world consequences of such action? Is is possible in a practical way to follow that prescription today or next week?

Conundumb states as fact:

Obama could kiss a baby and you declare he is a pedophile.

Whereas the posting record shows otherwise:

Credit where credit is seldom due
By Rodney Graves on September 23, 2009 at 05:06 pm

U. S. Delegation to the United Nations join the delegations of Argentina, Australia, Britain, Costa Rica, Denmark, France, Germany, Hungary, Italy, New Zealand in walking out on Iranian “President” Ahmadinejad’s Speech.

Presumably such an action required the approval of the President, so good on him.

More like this.

Hat Tip: Hot Air

Mike: Since the common sense, basic econ narrative isn’t getting through, let’s talk numbers.
Keynes committed two errors which turn his entire approach into nonsense. He created the concept of aggregate spending and aggregate demand, as if they represent any sort of reality. He based his entire “stimulus” strategy on these two concepts, and they are bunk.
All spending is not equal; spending money on beer and cigarettes isn’t equal to spending it on your 401k, for instance. Buying fleet automobiles for a thriving business isn’t equivalent, in terms of economic power, to spending money on family cars. On the demand side, the demand for hula hoops, for instance, is not as beneficial to the economy as demand for investment funds.
Keynes claimed that the multiplier effect for his stimulus spending was in the neighborhood of 1.5, as I remember from the last time I read his stuff. That sounds good; spend a dollar, and a dollar fifty of economic value is produced.
However, the multiplier of investment spending is in the range of 10 to 100, or more, so trading 10x spending for 1.5x spending is a very bad deal, and that’s what the so-called “stimulus” spending accomplishes. Moreover, the investment spending generates profit, which is necessary for the enterprise to sustain itself, so it doesn’t need outside funding. Stimulus spending, on the other hand, is not self-sustaining, and needs constant refunding to continue.

The bottom line to all spending is this: Is any value created? We spend our money in various ways, and no private citizen is under the impression that his or her spending on recreational items is profitable. It’s an expense, and people work to be able to do that sort of spending, but in order to maintain discretionary spending, investment, in terms of either money or time(or both) is necessary. Regular people can’t just print money when they want to buy something, they have to earn it. Excessive credit, spawned by easy lending standards, creates the impression of the person having more wealth than they actually possess, which leads to relatively more recreational spending, and proportionally less investment spending.
As a national economic policy, as with the present administration, this is deadly, since the currency get debased to fund this waste, in addition to the negative effects of the debt creation itself. It’s a double whammy, and it’s why there is no real recovery at this time.

You are right to be concerned with the current level of spending, Fly. In essence, FDR devised a plan for hiding the diseconomy of govt social spending by passing it on to future generations. That way, when the accounting finally comes due, like with the home loan crisis, those who started it, the social engineers during Carter, are long gone and not available to be held accountable. Social Security is an ever growing debt from 1938 that masqueraded as an investment program for retirement, but never yielded enough to be a functional investment program, so it was a fraud from the beginning. Nevertheless, the debt was passed on from generation to generation, and now the next generation will have to pay the bills. Likewise, Medicare was created in 1965, was never economically feasible, and now that bill is coming due. The money taken for it was never enough, due to the low yield of govt “investment”, so we have generations of Americans who have had their money taken, feel entitled to a return, but the money isn’t there, because it was never set up to work in the first place. The debt was simply passed on.

In fact, the free enterprise system, since it is profitable, has all the money to invest in the infrastructure it needs; it’s driven by real need, not political expediency.
The canard of “govt investing in infrastructure” is just another excuse for them to take our money to fund their ever-growing bureaucracy.

What would that be dino?

OK, another thread in which the mental retards need focus. There is no economic growth while while unemployment is rapidly climbing. Anyone who says there is is a moron. And a liar.

Obama placating Republicans? When has he or anyone on the left placated republicans? Look at committee votes for since the dems took back control; amendments have been blocked, cloture votes have been refused – they almost have a super-majority. If liberal policies work, why do they need to placate?

And it’s a fact tax cuts increase revenues, Congress admitted as much 15 years ago. http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm

Mike: There is no “stimulus” from govt redistributionist spending. You have to give up on that fairy tale.
The govt has only the money it has taken from citizens who have produced positive growth, and taking from them inhibits future growth.

“I agree that stimulus spending directed to political payoffs is economically ineffective but if the government hires a thousand guys to build a bridge and buys all of the stuff needed to build the bridge then those guys and those vendors have money to spend thus promoting economic activity.”

This is the basic flaw in that kind of thinking. Since all the money spent by govt is taken from citizens who would have used it in other ways, there is no net gain. The “economic activity” you mention is at the cost of other economic activity. However, when govt moves money around, there is a “service charge” due to the overhead cost of the various govt bureaucracies involved, so that less economic activity is generated than would have been generated had the govt not confiscated the money in the first place.
If left free of external coercion, the free market builds all the bridges necessary and economically feasible for the doing of business. All the govt can do is to distort the “bridge market” for political purposes, which is generally a negative effect, economically, since it drains capital that might be better used.

“It’s better than nothing if done right…”

Not true. In the first place it’s a false dichotomy; the real comparison isn’t between “something” and “nothing”, but between what the market requires and what the govt wants, which is always for political gain.
This is why our Constitution prescribes limited govt for a truly free populace. Govt tends to enslave us to achieve its own ends, when not strictly regulated. The reason we have the present metastatic growth of govt is because the people are not doing the job, but the Tea Parties indicate that time may be coming to an end.
Govt is a parasite; if it limits its consumption of our wealth, the relationship is healthy, but when it threatens to kill the host, as the Obama administration is doing, it has to go.

“…it involves real economic activity and is preferable to seeing those guys sitting at home.”

The only reason guys are “sitting at home” is because of the govt in the first place. The free enterprise system tends to employ as many people as possible, garner as much investment as possible, and to sell as many products/services as possible, unless inhibited by govt policies, taxes and regulations. Trying to solve a problem by doing what created the problem in the first place is sheer insanity.
The way to recover from all govt-caused downturns is to back off the govt interference to a level which doesn’t inhibit the natural growth inherent in the free enterprise system.
The more freedom, the better it works, given a minimal amount of regulation that promotes the doing of business, like enforcement of contracts and a stable money supply.
That is the goal; the closer we are to that, the better things are.

BTW, Mike, this has nothing whatsoever to do with what I like; it’s what works, and that’s what I like. I want the economy to work, and for the govt to serve us. That’s what we pay them to do.

Time will tell. I too expect another dip in the very near furture. This sort of deficit spending cannot create sustainable growth. And is economic growth on the backs of our children and grandchildren’s earnings really growth or just a temporary inflation in economic activity thanks to targeted deficit spending? I think the latter. Time will tell, very soon.

That’s why it’s more prudent for governments to spend less in good times thus not having to pile on as much debt in the not so good times. Easier said than done I know but that’s how it should work.

“Nobody should argue that the economic growth resulting from individual decision making and risk taking is greater than the economic growth resulting from decision making that is not restricted to the internal logic of the free market system.”

Actually, that is a very accurate argument, based on truth.

If “decision making that is not restricted to the internal logic of the free market system” actually produced economic growth(it doesn’t), then the Soviet Union would be a rich and powerful nation. It’s all about outcomes, Mike.
Your philosophy just doesn’t work in the real world.

Stimulus from taxed money is like injecting steroids into an artificial limb. No country has ever taxed and spent its way into prosperity. As long as the dems remain in power the business community will be very hesitant to invest or do anything because of the fear of having it all taken by the government.

RONFL, berlinwall boy, your understanding of economics can only rival your understanding of who built the berlin wall.

And I don’t expect this to be the end of it. I think we’re headed down again. The mess caused by 30 years of conservatism will take much longer than 10 months to fix. And Obama and the dems don’t have the stomach or power to do what needs to be done.

Revenues increased more when Clinton RAISED taxes.

That’s why it’s more prudent for governments to spend less in good times thus not having to pile on as much debt in the not so good times. Easier said than done I know but that’s how it should work.

You carry on as though government spending, and not private economic activity, were the engine that drives the overall economy.

Government spending, whatever the overall economic crisis, is always a net burden to the economy and never a boon.

The debate is always over how large the government should be and thus how much of a burden it should be on the economy. Given that some level of government is necessary, the debate is over the degrees.

Trying to redefine the debate with nonsense about government spending serving as a net stimulus is ridiculous. We may as well be debating whether or not the moon is made of cheese.

If good it will never be credited towards Obama from the cons ,ever.

Anyone could have predicted that this would end without any action and had a 50-50 chance of being right. It’s the amount of pain that occurred prior to that recovery that they couldn’t predict.

The debt and deficit are only slightly attributable to spending of the last 10 months. The bulk of the deficit was due to greatly reduced tax receipts caused by the downturn and the tax cuts in the stimulus bill forced on us by republicans Obama had to placate. And of that deficit spending, much was to alleviate suffering.

Here, read this again:

Why the Economy Needs Spending, Not Tax Cuts

To recap, the deficit came in $223 billion higher than projected, but spending was $28 billion and revenues were $251 billion less than expected. Thus we can conclude that more than 100 percent of the increase in the deficit since January is accounted for by lower revenues. Not one penny is due to higher spending.

And you didn’t explain why the magic CBO couldn’t predict the disastrous meltdown of last year. In fact, only a few economists called it. Using your logic, I was right back in 1983 when I predicted that conservative fiscal policy would do great damage to the country and result in the concentration of wealth in few hands. I also predicted that the housing bubble would end in disaster. And I wasn’t alone.

Hey, maybe I can get one of them CBO predictor jobs!

I do stand corrected, you are magnanimous in your praise.

Of course spending grew. So did the country. Duh.

Like I said, have a few more kids and take a pay cut. See how that works.

Even if we accept that government spending can be stimulatory, it must be spent right. Simply giving handouts to buddies will do nothing to stimulate the economy.

As we saw with C4C (Cash 4 Clunkers), any “stimulus” the government gave was temporary, and at extremely high cost. It first delayed sales, then simply moved other sales up. So it created an artificial little bubble that, when it popped, left the automakers worse off than before the stimulus.

It’s called the broken window fallacy. The idea that spending money on a broken window helps the economy ignores the truth that that money would’ve otherwize been used for something new that would’ve left everybody in a better situation than merely out of money and in the exactly same place as before. We will not fix our economy by going around breaking windows.

While I am happy to see that there is some indication of a recovery, predicted by many, not just the CBO, I am skeptical that it will sustain. Given the weak percentage of the stimulus bill that has actually been spent so far, I would say that it neither helped or hurt the present up-tick, other than the cash for clunkers and home mortgage credits running up the market artificially. If those numbers tank in this quarter as all indications show they will, we’ll be back in the tank soon.

Every money manager and financial planner I know (and I know quite a few) expect a double-dip, particularly once the inflation derived from all the crazy borrowing and spending kicks-in. There was an article somewhere yesterday that said that some of the market analysts believed the S&P was over-valued by as much as 40% and poised to crash. I hope that all the negative predictions turn out to be wrong, but I think erring on the side of caution at present may be the right thing to do.

Just a statement of fact. The left wingnuts will never admit that Bush did anything good and the vice versa for the right wing nuts. Obama could kiss a baby and you declare he is a pedophile. Stupidity runs rampant when it comes to the fringes left or right.

The government stimulates the economy by spending money when the citizens aren’t spending money.

That may be true in the short run, Mike, as the government borrows money to dump into the economy. But remember that borrowed money has to be paid back at some point, so any “stimulus” it may provide is more than offset by the burden it represents upon future tax earnings.

Not to mention interest payments, and at this point the impact our obscene national debt has on our currency and our stock markets should be calculated in as well.

You’re looking at the trees but missing the forest.

Look at Dino hedging his bets. Everything is wonderful! Obama is perfect in every way! But if the economy doesn’t get better it’s still Bush’s fault?

What a clown.

And for the record, Dino, I think what the government needs is spending cuts first and foremost.

Get tax rates back to where they were pre-reagan for starters.