Thread: John Stossel on the White House's Economics

Originally Posted by Blakeman

Where did he say the stimulus is actually hurting the economy? I read it as him saying it hasn't helped as much as promised in the fluff speeches. He is calling out the fact that nobody in government and specifically this administration likes to admit fault on anything. Bush did the same thing about the WMDs. Admitting a fault in something you did is a show of honesty and honor.

They have admitted they underestimated how bad the economy would get, but I don't see them as deliberately misleading on economic issues. He said most of the benefit would be reaped next year. He said it was going to take time and the stimulus was one step. Show me specific parts from speeches that you consider "fluff."

The Bush comparison is not really valid because he lied about the situation as a pretext for war. Assuming your right, what would misleading speeches be a pretext for?

Originally Posted by Blakeman

No, you need the economy to come around for the economy to come around. Confidence might make you feel better about it, but money does not having feeling.

If people don't have confidence in the economy and markets, people aren't going to spend. That's also the reason for the stimulus. When crisis hits, like it did, people save their money because of the uncertainty ahead. If people feel like they are going to be financially ok, they will spend because they have confidence. Thus, you need confidence for the economy to turn around.

Originally Posted by Blakeman

It may have been a success in the fact that many folks used it, but it is a little early yet to tell if it will have a long term affect on the economy or not. The very article you reference even said that in Europe sales were down by 20% the following year. Who knows if it will be a short term or long term benefit, I am of the mind that it was a fix and distraction and not viable over the long term.

Reread the article. That 20% drop was referring to doing this type of program during a booming economy, such as what France did in the 90's. The program's intention was to get more sales for the automotive companies, and it succeeded in that, no doubt. It got people in dealerships, even if their cars ended up not qualifying. It encouraged people who may have bought this year if the economy was better to buy now, and it pulled in others who probably would have waited. Will it affect sales down the road? I doubt it. The program didn't last terribly long, and many cars did not qualify. From my article:
However, in a situation where fear could lead consumers to shift to a lower level of demand that could last for years, breaking them out of that negative psychology could mean higher demand tomorrow as well as today."

Originally Posted by Blakeman

It's the punching in the face that is the gamble though. Poking them gently might not get them awake right away but you most likely won't get punched back. I'm not saying that anyone said it would save us all, but that it was a huge crisis that had to be acted on right away (your punch in the face) rather than debated (poking with a stick). I don't like that much of our money being spent at once in a gamble, you even said yourself that economists underestimated the problem, yet the did the punch in the face help or delay it, or will time itself fix the problem and everyone give the credit to the punch?

But punching them in the face will certainly wake them up. Poking them gently could end up being a huge waste of time and you may have to poke harder. Not only would you end up wasting energy (i.e. money) but also time without making things any better and you may then need to resort to more drastic measures. And even if they did wake up from the gentle poking, it would be very slow and they would be very groggy, taking them more time to become fully awake.

Originally Posted by Blakeman

I really want those at the top to get this right, I want them to spend our money wisely and not do things so quickly that even those voting for things are confused on the exact details. We have become a 'gotta have it now' society, but that can be our undoing if we let it.

Well, it really depends on what school of economics you adhere to. In a capitalistic system, I prefer Keynesian economics. You probably prefer Austrian or Chicago schools. This will greatly influence what you decide to do, and that's why I believe the President got it right, albeit with a less-than-ideal package.

Originally Posted by Blakeman

Mostly I am upset over the hyped up 'crisis' talk that went along with passing the stimulus. That is the fluff, that is the misleading. Any bills rushed through into law get my hackles up.

What was "hyped-up crisis talk"? Can you give me a specific quote? I don't remember any "zOMG, if we don't pass this, the country will end, you n00bs!!1!"-type talk. I do remember talk about it would be far worse without any stimulus, but that isn't hyped-up.

Originally Posted by Blakeman

Then the banks saved the money they received and for a while we had a whole different set of problems. Many folks still saved because they did not trust a supposed fix that was rushed through. If you want a fix you make it normalcy. Hand someone a $50 dollar bill on the street and it is abnormal and they are going to question its legitimacy. I still question the ramifications of this stimulus and if we will send our country further in debt by having to have another for the next 'crisis'.

I'm sorry, but this statement does not have a shred of truth to it. The economy crapped out months before the stimulus was passed, and once that happened, people slowed their spending. That was when all the confidence went out the window. People didn't just stop spending after the stimulus, and it makes no logical sense to draw that conclusion. If you want to return to normalcy, you have to pump in money to jumpstart the economy.

Originally Posted by Blakeman

We will see what happens. The president at least admitted it was still a problem today so we will see what happens next and if they keep messing about with it or if they leave it be with the money that is still being allocated out. With Saturn closing many of its plants I can't see it improving in the short term and I do not know if it had any affect on the long term of the car industry. I suppose in a few months we will see.

I'm not saying the program was perfect. It did accomplish its intended goal, though. Hell, just look at its popularity. I agree that we will have to wait and see its full effect, so would you not say it is premature to call the program a failure?

Originally Posted by Blakeman

Yes but it is still a bigger gamble. This isn't a guy at a roulette wheel in Vegas, this is the livelihood of millions of people.

Well, I disagree that this was some huge gamble. He was working on a proven principle, which is that government spending brings us out of recessions or depressions. The only question would be is if he will get the maximum possible stimulus.

Originally Posted by Blakeman

I hope it is the right thing and everything gets back to some sort of normalcy so that the country can work on other internal problems rather than money. I'm a doubter, but I am a doubter of all politicians as much as I am a doubter of media outlets, they are all out for something and it usually isn't you or me.

I'm not as cynical, but I agree that everything should be questioned. I didn't accept this stimulus package just because Obama and the Democrats pushed it. I looked at the numbers, and the numbers show that spending gives more stimulus per dollar spent than things like tax cuts. I have used historical events to come to this conclusion, too. I am not saying you are wrong to oppose it, but I think you should look into supporting views, too.

Originally Posted by Blakeman

cut videos

So the economic crash of 2008 wasn't a crisis? The collapse of the housing market isn't a crisis? Unemployment near 10% isn't a crisis? I thought you wanted him to speak the plain truth? Here he is, and now you have a problem with it? What would you prefer he call it? An economic "setback" or something? I still don't see anything "hyped-up."

Originally Posted by Blakeman

http://rotmaniib.blogspot.com/2009/0...it-sounds.html

http://www2.tbo.com/content/2009/mar...-money-study-/

Uh, neither of this links prove anything related to what you said. You said people stopped spending because of fear of the stimulus. The first link is about Canada and the Chicago school of economics answer to the problem and the second one is about banks not lending enough, which really isn't the fault of the government. Again, don't see how these support your previous point.

Originally Posted by Blakeman

It is also I believe premature to call it a success.

Well, its goals were to increase sales and sell more cars. It certainly accomplished those. The signs do point it to being a success, but you are right, we can't judge the long-term impact until more time passes. That's why I said it was premature for you to call it a failure a month after it ended.

Originally Posted by Blakeman

We will see, hopefully it all turns out well in the end, but I do not feel this was the way to go about doing it.

Again, he was operating on a proven method of repairing the economy. Doing nothing was absolutely not an option.

Originally Posted by Blakeman

Hopefully that spending does not lead to any major inflation or deflation, but again we will see and it is in, now it just needs to be seen what happens next.

There won't be major inflation or deflation. That's what the Federal Reserve is for. Regardless of your feelings for it, one purpose is to control inflation and deflation by controlling the money supply.