What is Keynesian Economics and why is it so destructive to America’s recovery?

Only those invested in pure ignorance can claim that the costs for Obama's programs will not have a profound negative effect for decades to come.

Only those invested in continued failure can ignore the history of recessions and their subsequent rapid recoveries. Had Obama done NOTHING, the recovery would have occurred and instead of being strapped with an additional $4 trillion debt and $1.6 trillion deficits we might actually be balancing our budgets by now.

I have to laugh at the idiot claim that without spending us into a $4 trillion hole, the economy would not have regained momentum. Cash for clunkers was a major failure; cash for mortgages a failure; the stimulus bill a major failure. And for all the trillions, the false claim of job creation; it takes 125,000 jobs per month just to keep up with population growth.

Yet the idiots on the left clamor that unemployment is only at 9% ignoring those that have just given up trying to find work and have run out of benefits after three years of this stupidity.

The same idiots who claim that 9% is an improvement are the same ones who claimed 4.5% was not good enough during the Bush administration.

Bush didn't create the housing crises; any idiot can see that. It was the child of progressive liberals and their lunatic politics to pander to morons who vote for them thinking they can get something for nothing. Fannie Mae and Freddie Mac are another in a long line of failures of Democrat progressive liberal ideology in action and both have been mismanaged into the ground by Democrat cronies.

Billions of taxpayer wealth is currently being dumped into these massive failures daily as we watch the housing market continue to tank.

Yes, I think I would have preferred the hands-off strategy that has always worked in the past for recessions over the idiot policies and legislation that has now sunk this economy into a vast $15 trillion hole and massive deficits inconceivable in the past. Yes, $4 a gallon gas, tanking housing markets, massive unemployment, $15 trillion debt and $1.6 trillion deficits are a sign of accomplishment Iriemon; and we have a chief admonisher in charge whom you voted for spewing his idiot divisive class envy messages in a desperate bid to once more fool morons into voting for him based on nothing more than Bush was worse because he and other empty headed leftists say so.

Carry on; 2012 cannot come soon enough.

 

Of course. After 7 years of the Bush tax cuts that were supposed to give us such great growth and pay down the debt, look how the economy was turning around on its own in Jan 2009 when Obama took office.


January 2009

Job loss: Worst in 34 years
Employers slashed 598,000 more jobs in January [2009] as unemployment rate climbed to 7.6%.

NEW YORK (CNNMoney.com) -- Employers slashed another 598,000 jobs off of U.S. payrolls in January, taking the unemployment rate up to 7.6%, according to the latest government reading on the nation's battered labor market.

The latest job loss is the worst since December 1974, and brings job losses to 1.8 million in just the last three months, or half of the 3.6 million jobs that have been lost since the beginning of 2008.

http://money.cnn.com/2009/02/06/news/economy/jobs_january/index.htm

Market players were also disappointed by reports that U.S. home prices fell 8.7% year-over-year in November, U.S. housing starts fell 15.5% in December, and weekly initial jobless claims rose 62,000 to 589,000.
http://www.businessweek.com/investor/content/jan2009/pi20090122_192905.htm

On Wednesday, the 30-stock Dow Jones industrial average finished with a loss of 248.42 points, or 2.94%, to 8,200.

http://www.businessweek.com/investor/content/jan2009/pi20090114_103250.htm

598,000 Jobs Shed In Brutal January
Unemployment Hits 7.6% as Downturn Picks Up Steam

The need for progress on those fronts seemed more important than ever yesterday, as the Labor Department announced that conditions worsened more than expected last month. The nation's employers shed 598,000 jobs, the most since 1974, driving the unemployment rate to 7.6 percent from 7.2 percent. If the jobless rate keeps rising at the pace it has for the past two months, it will hit double digits in summer and reach its highest rate since the Great Depression by the fall.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/06/AR2009020601156.html

GROSS DOMESTIC PRODUCT: FOURTH QUARTER 2008 (PRELIMINARY)
Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 6.2 [later revised to 9.2] percent in the fourth quarter of 2008, (that is, from the third quarter to the fourth quarter), according to preliminary estimates released by the Bureau of Economic Analysis.

http://www.bea.gov/newsreleases/national/gdp/2009/pdf/gdp408p.pdf[/QUOTE]

Continued Unemployment Claims at Record High
In the week ending Jan. 24, the advance figure for seasonally adjusted initial claims was 588,000, an increase of 3,000 from the previous week's revised figure of 585,000.

http://www.calculatedriskblog.com/2009/01/continued-unemployment-claims-at-record.html

Conservative economics makes sense. If you ignore reality.

 

This is nothing more than a deliberate lie and ignores the factual events which occurred on 9-11 that caused a significant impact to our economy.

One can only wallow in blissful ignorance of that fact.

A massive part of the deficit was due to two wars and too much spending; not because individuals who earned their wealth didn't have enough confiscated from Government entities.

Only empty headed fools incapable of doing simple math can claim we are not taxed enough already.

Increasing taxes has never led to reductions in deficits; merely greater levels of spending to pander to ignorant voters who think they can be entitled to something for nothing.

This notion that the reason times were good under Clinton were a direct correlation to his policies and the Democrat tax increases in 1993 can only be made in a vacuum of reality or facts.

The record of tax increases and tax decreases is well documented, and over our entire history the claim that tax increases have led to greater increases in revenue over tax reductions cannot be supported by those facts.

What we need to do is reign in the monstrous advance of Government, cut spending and subsidies and throw out this abomination called the tax code and go to a modified flat tax.

 

I think he handled it ok. Cash for mortgages should not have happened. You proudly tout bush's handling of the dot com bust by making a housing boom. All that did was kick the can down the road.
I guess you want obama to create another boom. I think we're boomed out and now the busts must play out.
Isn't that what you want? Bad debt has to be wrung out of the economy. Until that day, we are muddled in stagnant to falling growth.

 

Again, you spout off BS numbers from BS times. Don't count the peak of a housing boom as normal economic growth. This was a major major boom.
Boom and bust cycles happen, but this was extended and juiced up by bush's policies and policies before him.

 

Clinton served under the dot com boom. While there was real investments made in internet BW, it was overdone in the 90s. But we do reap those increased BWs today.

 

The economy grew over 3% that year, over 1% real. And more than that every year threreafter.

One can only wallow in blissful ignorance of that fact.

 

Bush served under the real estate boom. So what is your point?

 

But even with all that, by the time Americans gullibly fell for the idiot DNC talking points of the leftist media, the deficit had been reduced to about $161 billion. The following year with the fiscally challenged morons on the Democrat side in charge, the deficit ballooned to over $460 billion

I was citing the failure of your idiot DNC talking points by illustrating that even with the tax reduction, 9-11 and fighting TWO wars, the Republicans had managed the deficit to a low figure in historic perspective.

Once again I would ask you to cite a case where any Government has ever fought wars with a surplus and without deficits. You continue to willfully ignore this but we know why; it doesn't fit your narrow myopic talking points.

Meanwhile we are constantly fed an incredible line of drivel defending what Democrats have done with the deficit since taking charge; they took a $161 billion deficit and turned it into a $1.6 trillion deficit in four short years along with an additional $4 trillion debt after promising the morons who elected them they would be more fiscally responsible and transparent than the Republicans; how is this a GOOD thing.

It is another laughably stupid claim to suggest that Clinton’s policies had anything to do with the technology boom whose growth subsequently resulted in increased Government revenues along with fiscal restraint by Republicans that resulted in the surpluses you tout.

But it is the same foolishness that also argues that Republicans need to pass the tax increases Democrats refused to do. Why is that?

That’s it; this is all you got? There you have it folks from the progressive leftists; factually claiming we are taxed enough is warped thinking.

How am I making this up? By the time the accounting is done at the end of this month, we may find that this figure is even higher.

 

http://en.wikipedia.org/wiki/Trickle-down_economics
"Trickle-down economics" and "the trickle-down theory" are also pejorative terms[citation needed] that refer to the policy of providing across the board tax cuts or benefits to businesses and the wealthy, such as tax breaks, in the belief that this will indirectly benefit the broad population.[citation needed] The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."

Just what the RWers, who wallow in blissful ignorance, spout on an hourly basis. Don't tax the rich, they will use that tax money to create jobs. Well 10yrs later, still no jobs.

What is your definition of "supply side"?

 

And of course you ignore reality claiming that the job losses and stock market tanking were related to Bush tax cuts? How irrational does one have to be to make such a laughably lunatic claim?

Bush policies had NOTHING to do with the mortgage meltdown that resulted in the stock market crash. Please provide one credible fact linking Bush policies with the antics of Wall Street, Fannie Mae and Freddie Mac.

These were all the brain child of progressive liberals who wanted to create a piggy bank to pander to ignorant voters who thought they should be entitled to homes without the responsibility of paying the loans back; another failed attempt at progressive liberalism.

The Federal National Mortgage Association (FNMA; OTCBB: FNMA), commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.[2] The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS),[3] allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts.[4]

1990s

In 1992, President George H.W. Bush signed the Housing and Community Development Act of 1992. The Act amended the charter of Fannie Mae and Freddie Mac to reflect Congress' view that the GSEs "have an affirmative obligation to facilitate the financing of affordable housing for low-income and moderate-income families."[14] For the first time, the GSEs were required to meet "affordable housing goals" set annually by the Department of Housing and Urban Development (HUD) and approved by Congress. The initial annual goal for low-income and moderate-income mortgage purchases for each GSE was 30% of the total number of dwelling units financed by mortgage purchases[15] and increased to 55% by 2007.

In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the CRA of 1977.[16] Because of the increased ratio requirements, institutions in the primary mortgage market pressed Fannie Mae to ease credit requirements on the mortgages it was willing to purchase, enabling them to make loans to subprime borrowers at interest rates higher than conventional loans. Shareholders also pressured Fannie Mae to maintain its record profits.[16]

In 1999, The New York Times reported that with the corporation's move towards the subprime market "Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s."[17] Alex Berenson of The New York Times reported in 2003 that Fannie Mae's risk is much larger than is commonly held.[18] Nassim Taleb wrote in The Black Swan: "The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events 'unlikely'".[19] Mike Stathis also warned about the risks of Fannie Mae, triggering the financial crisis in America’s Financial Apocalypse. “With close to $2 trillion in debt between Freddie Mac and Fannie Mae alone, as well as several trillion held by commercial banks, failure of just one GSE or related entity could create a huge disaster that would easily eclipse the Savings & Loan Crisis of the late 1980s. This would certainly devastate the stock, bond and real estate markets. Most likely, there would also be an even bigger mess in the derivatives market, leading to a global sell-off in the capital markets. Not only would investors get crushed, but taxpayers would have to bail them out since the GSEs are backed by the government. Everyone would feel the effects. At its bottom, I would estimate a 30 to 35 percent correction for the average home. And in ‘hot spots’ such as Las Vegas, selected areas of Northern and Southern California and Florida, home prices could plummet by 55 to 60 percent from peak values.”

 

Once again you should read your own sources before attempting to lecture someone who knows what they are talking about:

The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."[1]

Here is my definition of "supply-side":

Supply-side economics is a school of macroeconomic thought which emphasizes the importance of tax cuts and business incentives in encouraging economic growth, in the belief that businesses and individuals will use their tax savings to create new businesses and expand old businesses, which in turn will increase productivity, employment, and general well-being. While all macroeconomics involves both supply and demand, supply-side economics emphasizes the importance of encouraging increases in supply. It was popularised in the 1970s by the ideas of Robert Mundell, Arthur Laffer and Jude Wanniski. The term was coined by Wanniski in 1975.

In 1978 Wanniski published "The Way the World Works" in which he laid out the central thesis of supply-side economics and detailed the supposed merits of low taxation and a gold standard.

In 1983 economist Victor Canto, a disciple of Arthur Laffer, published The Foundations of Supply-Side Economics. This theory focuses on the effects of marginal tax rates on the incentive to work and save, which affect the growth of the "supply side" or what Keynesians call potential output. While the latter focus on changes in the rate of supply-side growth in the long run, the "new" supply-siders often promised short-term results.

The fascinating thing about the false claim this is "trickle-down" is the notion that allowing individuals to keep MORE of what THEY EARNED is somehow "trickling down."

Once again I will emphasize; supporting Government Confiscation of the wealth earned by individuals in order to pander to ignorant voters by re-distribution is a better definition of "trickle-down" and illustrative of failed policies of the past.

Please show me a single society that has prospered by stealing wealth of its citizens and re-distributing it.

 

Only because the costs of the wars weren't included.

Asked and answered.

The Govt has only ran surpluses once in the past 50 years or so when Clinton was president. But the Balkans war was during that time

Thanks to the Great Bush Recession.

The tax increase which resulted in revenues growing far faster than the economy had a lot to do with it.

Fiscal restraint by the Republicans? You mean the same guys that squandered the Clinton surplus and ran up $5 trillion in debt?

Jeez and you call us delusional.

Tax revenue collections are relatively at 60 year lows and we have deficits.

I have lots more. It was all your post was worth.

You claimed there was a $1.6 trillion deficit. Making up things again, are we?

 

You are correct on all points, Truth Detector.

The liberals in this group would be totally lost withour their DNC talking points!

 

This discussion by Truth Detector was very thoughtful and very correct.

 

The cost of the wars were around $100 billion a year, Obama raised the deficits by over ONE TRILLION per year. You statement is laughable.

And beyond that national security is the TOP SPENDING priority. Once Congress authorizes military force and our troops in harms way it gets paid for first. Everything else comes after.


We don't pay for (*)(*)(*)(*) Christ art............and then fund war
We don't pay for solar panel research............and then fund war
We don't issue Pell Grants...............and then fund war
We don't study mating habits of frogs...........and then fund war.
We don't pay unemployment..................and then fund war.
We don't pay to hook people up to the internet.............and then fund war.

 

More correctly when Gingrich and Kaisch controlled the purse strings. Clinton's plan never predicted a surplus instead predicted continued deficits and in fact slowed the growth of revenues.

 

all Obama did was throw money at the problem.......the same mistake that Japan did in the 1990's. It didn't work for Japan and it won't work for the US either!

 

As was already explained to you, your numbers are nonsense. My numbers come from the CBO, presented in an easy-to-understand graph.

 

It's not a deliberate lie, it's an actual fact. Those numbers come from the CBO. And tax increases have never increased revenues? Show me one credible source that makes this case.

 

You are correct in each of yuor conclusions, Truth Detector.

Thanks for sharing.

 

This review was very good.

"The facts confirm the Barro and Redlick—and countless others’—research. The Keynesian model didn’t work in the case of the current recession, and even if one accepts the stimulus as an a priori good, it is unsustainable at its current rate. According to David Primo, associate professor at the University or Rochester, “Bailing out states rewards their bad behavior.” When states receive federal funds to sustain their spending habits, they are not forced to “face the music” and engage in budget reform. Essentially, it is that budgetary reform that targets the source of the financial crisis and will ultimately fix it."