Lib economist Larry Summers wants even MORE gov't. "spending"

The "Great Recession" officially ended exactly five years ago: http://www.nber.org/cycles/sept2010.html . Beginning in August 2007 and continuing right through this morning, the Idiot Bush and Idiot Obama regimes have fronted every kind of anti-free-market business manipulation, "Stimulus", "Twist", and three (THREE) bouts of "Quantitative Easing" (which is Federal Reserve bull****-speak for pulling trillions of dollars out of thin air to buy investment bankers' toxic "assets" and, uh, "bonds").

Now, here they come again... it's the "distinguished" liberal economist, Lawrence Summers (college professor, Clinton Treasury Secretary), saying that what the economy needs is -- get ready for it --
MORE GOVERNMENT SPENDING! You just can't make this kind of crap up... here's the essence of what Summers advocated in January, written in the tortured way that Libs always do when they say we need to blow more billions of dollars on government spending. The culprit threatening the economy, this time, is (get ready for another bull****-speak term) SECULAR STAGNATION!

(To improve the situation, according to Summers,) "means ending the disastrous trends toward ever less government spending and employment each year and taking advantage of the current period of economic slack to renew and build out our infrastructure. If the federal government had invested more over the past five years, the U.S. debt burden relative to income would be lower: allowing slackening in the economy has hurt its long-run potential. These two sentences are buried down in paragraphs of other bull**** found here: http://www.washingtonpost.com/opinions/lawrence-summers-strategies-for-sustainable-growth/2014/01/05/9143313c-74b9-11e3-8b3f-b1666705ca3b_story.html

Today's Denver Post gives us this latest spin on Summer's economic "thesis" -- http://www.denverpost.com/business/ci_25892588/u-s-economy-needs-different-fix-argues-larry

FDR's liberal Democrats never understood that the Great Depression (the REAL one, in the 1930's) was never going to be fixed by all the socialist crap they dreamed up with their "New Deal" ,and, "Second New Deal". But, FDR and Churchill cut off all oil supplies to Japan while both countries were at PEACE with Japan. Japan attacked both British and American territories in retaliation, and because of Japan's alliance with Germany, American found itself in another world war -- which, because of federal government spending, ended the Great Depression, and it only cost 460,000 American military personnel their lives....

So, how 'bout it, Professor Summers? You hoping to get this country involved in yet another world war? Is that the "government spending" ticket to get us out of this mess that you hyperlibs have made even worse since Idiot Obama has been in office...?! Sure, let's get in a real big pissing-match with Russia and China and see how quickly THAT fixes the economy....

 

Summers is just blowing the company horn and coming out with a new buzz word phrase to justify throwing away billions more dollars. Democrats are all the same, they spend money as fast as they can get their hands on it, and when they run out, they whine and (*)(*)(*)(*)(*) and get the Fed to print more of it. The only "secular stagnation" I know of is when athiests don't bathe often enough.

 

Summers was father of the Obama Stimulus. Considering his track record on that, I would hesitate to take him seriously.

 

I take Summers and Yellen (the Bernanke clone-without-a-beard) enough to know that they'll keep on "rescuing" investment bankers and Wall Street gamblers, while they continue screwing people to death who actually save money. Between clowns like Summers and the Federal Reserve combine, the entire free-enterprise economic system has been totally hijacked and held at gunpoint. This "secular stagnation" horse**** is just another hyperlib socialist trick to make sure the money "presses" go right on "printing" tons of worthless paper to float Obama's boat.... At the rate we're doing this, we won't even be able to pay interest on all the debt we've already racked up. And nobody cares....

 

Secular stagnation is horse(*)(*)(*)(*).

The problem is we have a liquidity trap. There is very little money available because banks can get a better, safer return just keeping their money at the Fed rather than loaning it out. We need to have the Fed make its interest rate zero and if that doesn't stimulate credit availability, we need to have them start charging banks for the "privilege" of keeping money at the Fed.

 

Summers is right.

The Stimulus was too small and too short to produce a real recovery. All it did was arrest the decline.

Evidently the Republicans don't believe in maintaining anything, as they have consistantly opposed investments in infrastructure investment or maintenance. This wasn't just in 2008 and 2009, it has been consistant for many years now.

The infrastructure push in the Stimulus bill was a fraction of what engineers called for, and was opposed lockstep by the GOP.

I realize taht right wing revisionist history discounts the effects of the New Deal, but I see it all around me here in my home town. Various WPA "make work" project, like the park and marina at the end of my street, the hospital two blocks away ,and the bridge that carries the four lane highway across the Susquehanna River are still there., and still providing benefits long after the people who built them departed this life.Oh, yeah, I left out the Post Office.

 

Spending and Govt employment:


Reagan
Spending increase, 1981-1985: +39.5%.
Total government employment, 1981-1985: +607,0000

Bush
Spending increase, 2001-2005: +32.7%
Total government employment, 2001-2005: +603,000

Obama
Spending increase, 2009-2013: -1.89%
Total government employment, 2009-2013: -667,000

source data
Expenditures: http://cbo.gov/sites/default/files/cbofiles/attachments/45249-2014-04-HistoricalBudgetData.xls
Employment: http://www.bls.gov/webapps/legacy/cesbtab1.htm

I frequently see conservatives dissing Obama by comparing the current recovery to that under Reagan. Maybe we should be doing it more like under Reagan.
Maybe Summers is on to something. The Republican Tea Party enforced austerity hasn't been working so great, has it? Just as it hasn't in Europe.

The Govt is currently spending less that 9 of the 12 Reagan/Bush1 years, proportional to GDP. We could, and should, be increasing spending within a limit that continues to slowly lower that number.

Why would you think we need to get involved in another war to increase spending?

Why would you think that FDR's New Deal didn't produce positive results?

 

Didn't Summers lose a boatload of Harvard's endowment fund prior to 2008?

 

The problem is that under TARP, the FED started paying interest to the banks for their money, so in a low interest environment like this one, there is little incentive to for the banks to lend since they are making money by doing nothing for it anyway. That's why we've had the weird situation of low interest rates and plenty of liquidity, but the banks are not going out of their way to loan that money out.

I don't agree with going to zero interest rates though. These super low rates are part of the reason we had a housing bubble in the first place. They're doing more harm than good now. If interest rates would rise, the banks would have more incentive to push money out the door.

 

Funny thing about numbers. You can twist them to come up with the intended result.

Change the metric to percentage of GDP and the chart flips upside down.

FDR's new deal extended the great depression. There is plenty of evidence to support this out there.

 

Not surprising at all considering the source.

He and many others thought that the stimulus was far too small and still believe there are idol resources that could be put to work via government spending. I do not believe however he'd think war would be an appropriate way to increase government spending as insinuated in the OP.

 

You think?

Year - Spending:GDP
1981 21.12%
1982 22.29%
1983 22.22%
1984 21.08%
1985 21.77%

2001 17.53%
2002 18.31%
2003 18.76%
2004 18.68%
2005 18.88%

2009 24.40%
2010 23.11%
2011 23.19%
2012 21.77%
2013 20.56%

Source data: BEA.gov; CBO.gov.

Nonsense.

Year - % chng GDP
1930 -11.9%
1931 -16.1%
1932 -23.1%
1933 -3.9% <- FDR takes office
1934 +16.8%
1935 +11.2%
1936 +14.3%
1937 +9.5%
1938 -6.0%
1939 +7.0%
1940 +10.1%

source data: BEA.gov

I'll agree there's plenty of misleading RW propaganda.

 

Summers was also the one that fought regulating derivatives during the Clinton administration.

http://www.nationaljournal.com/magazine/the-case-against-larry-summers-20130912

 

They're paying what? 0.25%? Not much of an incentive not to loan when loans generate many multiples of that.

The Housing Bubble had many causes, and blaming it solely on interest rates is sophomoric.

The Fed consistently raised rates starting in 2004 and it had little effect on the housing bubble.

 

So you are essentially arguing there was no Great Depression and that was just RW propaganda. Go figure.

 

0.25% is a better return than what?

 

Now it seems to me that is exactly what Republicans do eveytime they hold the presidency please explain why it is good for Republicans to spend money we dont have but when some one else does it . They are muslim commies??

 

No, I am not essentially saying that at all. You didn't figure.

 

It is often suggested that FDR made the Great Depression last 7 years longer, much like Obama is doing with this recession.

 

RW propaganda often "suggests" all sorts of inane things and their acolytes just lap it up as rote.

 

Uh, what?! How many times did a Republican president get us into a world war? None? How about the Korean War? How about the Vietnam War? How about the Balkans War? Were all of them Democrats? Oops!

Now, Bush the Elder and Bush the "W" did get us into the "******* Wars", the first one in '91, and the second one in 2001, but in both those cases there were very clear-cut American national interests indicated, especially Saddam Hussein's attempted takeover of all the oil in Kuwait, and the threatening posture he would have had vis-a-vis Saudi Arabia. "W" Bush's wars in Iraq and Afghanistan were very ill-advised, but everyone in all the "alphabet" intelligence agencies were certain Saddam was getting nuclear weapons. So, I'd score one for Democrats because of "W" Bush's screwup, and I'll even call it a "draw" on Kuwait, since we sort of had to go back in... but ALL the rest of the wars? Sorry. You had a Democrat in the White House when we got involved in every other war, and, in retrospect, we did not have to be involved in ANY of them.

And before you mention "but, the Japs bombed Pearl Harbor and forced us into war", you really ought to at least skim through:
http://www.salon.com/2013/12/05/oil_led_to_pearl_harbor/
http://www.theamericancause.org/patwhydidjapan.htm

Briefly, FDR and Churchill had been spoiling for two years to find a way to get America into the war, so they cut off all of Japan's oil supply when all three nations were completely at PEACE with each other. The Japanese seized the East Indies oil fields and bombed the navy fleet at Pearl Harbor in self-defense. A modern nation without oil is a dead nation, and Churchill and FDR knew that only too well....

 

Heh, they make it up in volume! I'm not sure why this far from the financial crisis we are still paying anything. Sounds like a government give away.

I didn't say it was the sole cause, I specifically said it was "part of the reason." If you are going to reply, it wouldn't hurt to actually read what you are replying to.

 

It's not the volume, it's whether there there is little incentive to lend as you claimed.

You haven't helped explain how there's little incentive to lend when they're only getting 0.25%.

 

I'm glad to be seeing posts from you again, even though we don't agree on a number of things, especially those regarding the economy. Let me ask you this: you have provided facts and figures juxtaposing spending levels by Democrats, and those by Republicans. But what did a Republican, like Reagan for instance, spend the money on? What has a liberal Democrat like Obama spent the money on? And, maybe most interesting of all, what did Bill Clinton, who both of us like, but perhaps for somewhat different reasons, spend money on?

We have blown astonishing amounts of money under both Bush and Obama, and what have we got today to show for it? The Fed interference began in earnest in August 2007, and it continues, of course, to this day under Bernanke-clone, Yellen. Now we've got Larry Summers rolling out this "secular stagnation" mumbo-jumbo -- to what purpose? To provide justification for more government spending? Is there any other agenda?

 

Reagan spent it on things like "Star wars" which was a colossal waste. Obama spent it on helping cops and teachers keep their jobs.

But it doesn't make that much difference. Money spent gets respent in the economy, unless it goes into the offshore accounts of the uber rich.

The relevant fact is that Reagan increased spending by (*)(*)(*)(*)loads, which created lots of jobs. And total government employment increased by over 600,000 in his first 4 years.

Under Obama, we've had Tea Party austerity, and a net decrease of 600,000 government jobs.

o Turned around an economy that was tanking at a -9% rate and shedding 700,000+ jobs a month
o 49 straight months of private sector employment growth.
o Saved 2-3 million jobs with stimulus package
o Over 8 million additional private sector jobs created since Jan 2010
o 4 straight years of GDP growth
o Unemployment rate dropped from 10% to 6.3%
o Net creation of millions of people employed despite inheriting a economy losing 700,000+ jobs a month.

Sure. They should be increasing the minimum wage, increasing taxes on millionaires, empowering unions to represent low wage employees, increasing estate taxes, eliminating the investment tax privilege for the uber rich, eliminating the SS tax cap, applying FICA taxes to investment income, cutting the SS tax rate for the middle/poorer class workers, expanding financial grants for education and worker retraining.

In short, reverse "trickle down"