Quote :

"they did nothing to stop the hemorrhaging debt"

Not only did they do nothing, but they made it worse. They got us into an expensive war and gave tax cuts during a boom. You're supposed to save in a boom and spend in a bust.

2/17/2010 7:11:17 PM

not to mention the real killer: the largest expansion in medicare in a generation that was unfunded.

2/17/2010 7:13:07 PM

passing the medicare drug plan during the wars and a tax cut was the most irresponsible spending i have ever seen. Until late 2008 and since... Just because bush pissed in the pool doesnt mean its ok to take a shit in it now.

2/17/2010 7:13:48 PM

Well if spending now helps to grow the economy, then the increased tax revenue could help the debt, or at least keep it steady, assuming we see more growth than we spend.

2/17/2010 7:18:53 PM

The spending isn't "growing" shit. It's toxic. It's all based on debt that can never be paid back legitimately. The Japanese tried doing these Keynesian spending packages and it didn't help. Now we're doing it, but on a bigger scale and with other people's money.

2/17/2010 8:02:21 PM

i could be paid back legitimately, but whoever tried to do it would look extremely unpopular in today’s climate.

2/17/2010 8:03:32 PM

^^ I would like to second this sentiment.

2/18/2010 11:43:53 AM

Would you second the stupid example?

2/18/2010 5:49:13 PM

If you can't be cordial then I'm just going to ignore you. Now, if you have good reasons as to why Japan makes a POOR example of stimulus spending, then please, enlighten us.

[Edited on February 18, 2010 at 9:18 PM. Reason : .,.]

2/18/2010 9:03:58 PM

First off their stimulus was much bigger than ours, secondly it acted much less decisive and more slowly, third, who's to say it didn't work, Japan didn't suffer that big of a downturn, had it been executed better the results may have been even more positive.

2/18/2010 10:56:01 PM

Quite true, but I was under the impression that the purpose of stimulus (and today, bailouts) was "in the long run we are all dead". As such, you are clearly right that the Japanese stimulus probably worked in the short term, the onset of recession was small relative to what we should have expected.

But we don't all die in the short-term. I suspect Japan would have been better off with increased pain during the first year or so of recession if it would mean avoiding the lost decade that followed. I realize that is a personal preference, as the utility of either outcome cannot be calculated.

That said, is not the purpose of stimulus just to force monetary policy? Why would we need Congress for this? The trick is having the fed print money. We currently do this by running it through FOMC, banks, treasury, congress, government workers. Why was the helicopter idea a bad one? It would avoid liquidity traps, it would avoid giving money to the bankrupt, and it would avoid mal-diversion of resources to temporary government jobs. The Chinese do this with foreigners. Their central bank prints money and uses it to store dollar assets. Might we do this too (only for stimulus reasons, obviously)? It would suffer the problem of mal-diversion of resources to temporary foreign demand. Maybe a better idea is to simply have the fed pay all our income taxes that year.

2/19/2010 11:40:47 AM

Quote :

"I suspect Japan would have been better off with increased pain during the first year or so of recession if it would mean avoiding the lost decade that followed."

Who's to say the depression would have ended sooner had the stimulus not occurred?

Quote :

"That said, is not the purpose of stimulus just to force monetary policy?"

Not at all. If the point was just to give people money, then I'd agree with your methods. But that's not really what it tries to do, it simply tries to get money moving, and fidgeting with taxes or rebates just doesn't do that as well as other measures.

2/19/2010 6:21:11 PM