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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM
Surpluses and deficits have little to do with overall employment. If the federal or state and local governments hire people, then that's more employment. If they fire people, that's less employment. If you're operating near full employment, then necessarily people who are hired by the government are people not working in the private sector-but that's only true if you're at full employment.
Right. So-called "crowding out" effects only occur at full utilization. If the private sector is underutilized, then the government can/should pick up the slack, by hiring people directly (state aid) or engaging in stimulus to boost private demand, or both.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"Let me put it this way.
Barkey: Construct a scenario that you think would be superior to the current scenario, and in what ways/why as it pertains to debt/spending/etc. Remember to itemize what specific values are in play. I mean, I can say "we'd have higher unemployment" but if employment isn't a value, then we're talking at cross purposes.
As an economist, we can't argue against "why debt is bad" without someone suggesting "why debt is bad."
edited 17th Nov '12 7:36:32 PM by TheyCallMeTomu
Several Things:
- First The Housing Market Bubble
popped. This caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally.
- Meanwhile due to a long trend of government deregulation had lead to over-inflated asset prices and the rapid growth of the "shadow banking system", basically leading to Banks giving out some pretty risky (and rather stupid) loans. When the Housing Market collapsed these banks were faced with massive loan losses, which in some cases lead to bankruptcy. This lead to a Credit Crunch that further hurt the economy's ability to recover
- All of this damaged people's faith in the Stock Market, sending stocks plunging. It also caused consumer spending and international trade to decrease.
- The 2003-2008 energy crisis and the lack of consumer spending lead to Automotive industries (especially America's Big Three
) experiencing massive sales declines.
- The War on Terror (and by extension the Iraq War) combined with the Bush Tax Cuts lead to the rapid growth of America's national debt and federal budget deficit. Fear of the both of these things further damaged consumer spending and handicapped the American government's ability to fight the recession.
- And the European Union basically fell into a sovereign-debt crisis which was made worse by counter-efficient, reckless Austerity measures.
edited 17th Nov '12 9:08:42 PM by DeviantBraeburn
Everything is Possible. But some things are more Probable than others. JEBAGEDDON 2016![]()
He means the ill-fated attempt to create Universal Healthcare under the Clinton Administration, which gave us gems such as these ads
that preyed on the public's fear and uncertainty.
And what he said.
On a different note, there was an excellent editorial
in the Times yesterday about the South. I would very much recommend that Northerners and West-Coasters who identify as liberal read it.
edited 18th Nov '12 12:26:36 AM by darksidevoid
GM: AGOG S4 & F/WC RP; Co-GM: TABA, SOTR, UUA RP; Sub-GM: TTS RP. I have brought peace, freedom, justice, and security to my new Empire.

@Barkey: Foreign aid is a drop in the bucket of discretionary spending. And a country operating entirely without debt issuance would be catastrophic for the investment industry. Debt is an incredibly useful tool for economies; it acts as a multiplier, allowing saved cash to be reutilized for other purposes. A debt-free economy would not only be much less vibrant than otherwise, but it would be more vulnerable, not less, to shocks.
@Trivialis and Joesolo: It would be useful to reduce the deficit, yes. After we get the economy back to full capacity, many means-tested expenditures like Medicaid, unemployment, welfare, etc., will be reduced, while tax revenues will increase, bringing us back to a surplus without the need for arbitrary spending cuts. Of course, we also need to raise taxes to increase revenues, preferably on the people who can most afford it.
You know, what happened when Clinton was in office.
edited 17th Nov '12 7:11:49 PM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"