Haven - cutting welfare

Tenshinai wrote:

darrell wrote:...
The theory is that government regulations, bailouts and stimulus hurt the economy.

The problem is that NOT using bailouts and especially stimulus hurts it even more.

And government regulations, well look at Russia under Yeltsin and you will see what kind of nightmare THAT ends up as.

The catch has always been that the government can not look like it is doing nothing to help the economy when things go south. Many actions the government takes at such times are more to buy time for the public calm down enough for the system to re-balance it self.

pnakasone wrote:The catch has always been that the government can not look like it is doing nothing to help the economy when things go south. Many actions the government takes at such times are more to buy time for the public calm down enough for the system to re-balance it self.

And typically they instead screw it all up, like FDR prolonging the Great Depression by 7 years.

kzt wrote:

pnakasone wrote:The catch has always been that the government can not look like it is doing nothing to help the economy when things go south. Many actions the government takes at such times are more to buy time for the public calm down enough for the system to re-balance it self.

And typically they instead screw it all up, like FDR prolonging the Great Depression by 7 years.

Difference between Keynesian-ism and Austrian economics!

If the damn politicians could let the downward dip of the roller coaster hit the bottom before climbing back up our drops would never be that bad, and our rises would always lift us above where we were. But they can't. Damn politicians.

Tenshinai wrote:

darrell wrote:...
The theory is that government regulations, bailouts and stimulus hurt the economy.

The problem is that NOT using bailouts and especially stimulus hurts it even more.

And government regulations, well look at Russia under Yeltsin and you will see what kind of nightmare THAT ends up as.

Not true. Milton Freedman Won a Nobel prize when he proved that it is not true!

Government bailouts and stimulus are like putting a band aid on an infected cut. it temporarily makes it look better but the infection just get worse.

Eventually the infection bursts, and it is 10 times worse than if you had let it heal naturally.

As a prime example is the housing crisis of 2007. Housing started to be inflated starting about the year 2,000. Under a true free market system, about 2,003-2,004, there would have been a correction, and most homes would have lost 10% to 20% of their value.

Enter the US government programs Fanny May and Freddy Mac. They put Government money into the housing market to keep the value up. As a result the problem just got worse. Finally it just boiled over and in 2,007 the average home value was cut in half, with some houses loosing most of their value.

Without the government stimulus, home prices would have dropped about 15%, a minor ouch. Because of the government assistance provided by fanny and freddy, the drop in home prices was delayed, was 3 times bigger, and created the recession of 2,008

darrell wrote: created the recession of 2,008

I'm assured that this summer is going to be that wonderful "Recovery Summer" that has been promised to us by the current administration for the past 7 years.

kzt wrote:

darrell wrote: created the recession of 2,008

I'm assured that this summer is going to be that wonderful "Recovery Summer" that has been promised to us by the current administration for the past 7 years.

It's coming! If you don't believe me, just ask your friendly neighborhood bureaucrat! He/She will tell you the recovery has been going on for the past 6 years, and they will have official statistics to back it up!

Washington is basically Nouveau Paris. The politicians and bureaucrats and lobbyists have had a full recovery as of 2010, so clearly the whole country has. They've been re-elected, gotten their pay raises, and have kept their jobs. Therefore, all is well in America.

Seriously..... There are time when (speaking entirely theoretically, my dear NSA/FBI/CIA/etc) that I wish someone detonate a nuke in DC. At the very least a few thousand of rats and cockroaches would die, and that isn't even including all of the politicians!!

kzt wrote:

pnakasone wrote:The catch has always been that the government can not look like it is doing nothing to help the economy when things go south. Many actions the government takes at such times are more to buy time for the public calm down enough for the system to re-balance it self.

And typically they instead screw it all up, like FDR prolonging the Great Depression by 7 years.

quote: prolonging the Great Depression by 7 years.
"So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies."

Just two words: minimum wage.

prolonging the Great Depression by 7 years.
Cole and Ohanian calculate that NIRA and its aftermath account for 60 percent of the weak recovery. Without the policies, they contend that the Depression would have ended in 1936 instead of the year when they believe the slump actually ended: 1943.

It took WW2, when 25% of the population was in the army, to heal the depression 25% unemplyment rate.

prolonging the Great Depression by 7 years.
"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."

Erls wrote:Seriously..... There are time when (speaking entirely theoretically, my dear NSA/FBI/CIA/etc) that I wish someone detonate a nuke in DC. At the very least a few thousand of rats and cockroaches would die, and that isn't even including all of the politicians!!

How dare you!

How dare you insult rats and cockroaches by compareing them with politicians???

darrell wrote:

Erls wrote:Seriously..... There are time when (speaking entirely theoretically, my dear NSA/FBI/CIA/etc) that I wish someone detonate a nuke in DC. At the very least a few thousand of rats and cockroaches would die, and that isn't even including all of the politicians!!

How dare you!

How dare you insult rats and cockroaches by compareing them with politicians???

It is not something I do lightly. And frankly, if rats and cockroaches were not so closely related to NYC I wouldn't relate them... But, behind Washington I can't think of a city I'd like to see disappear more that NYC. So many parasites.... And by parasites I don't mean rats and cockroaches!

If your an elected official you try and convince the voters the best thing for the government to do nothing while their children are going hungry.

If the guy your running against in an election is promising that if elected they will do something to help the voters while you appeared to have done nothing who gets the job?

What may be sensible economically policy is often unsupportable politically when put in front of the voters as a whole.