Chuck Shumer says American's don't care about pork

Debt does not solve debt problems. It is that simple, and just so you know, I did make A's in all my economics classes, and finance classes through college.

You can say what you want, but they are throwing money at the problem. Throwing money at problems only delays the pain and suffering.

 

I am not saying anything at all about debt.

Please read my posts - you will see I am not.

I am talking about a simple assumption.

The question that you are arguing against is thus:

If I consume X at time Y, and then I consume X +1 at time Y - has my consumption increased?

Yes or No.

Simple question.

If the answer is yes, then spending = stimulus.

If the answer is no, then you and the Republicans are correct insofar as spending does not increase demand and does not act as a stimulus.

Simple question.

 

Debt is also not inherently bad or wrong, but that seems to be the entire underpinning of your argument.

 

There is a severe problem with massive debt. It is unsustainable. I used to feel the same way you do, but I kept looking and wondering at what point is there no return. Debt helped lead to the Great Depression. Debt helped lead to the mess of today.
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I am talking about the real state of economics. Yes, the government can artificially stimulate the economy, but the real stimulus isn't there. That is why I am saying it is just an attempt to delay the inevitable. My big fear is that the government will see their debt bubble burst. I would be inclined to agree with you if the government was sitting on a surplus, or needing just a temporary deficit. Deficit spending was never meant to be permanent, but both parties have taken to it. We are too much a of need it now society. Maybe I'm just being a pessimist, or maybe I'm right, or maybe I'm somewhat of both.

 

That's a fundamentally different argument though from that which you were making before (and that Republicans were making last week).

Saying "that's not stimulus, it's just spending" is just flat wrong, saying " the spending is stimulus, but that stimulus in the short run will be outweighed by the long term cost" is a different argument. Not one that I agree with in this instance given the incredibly dire straits we are in, but one that is at least defensible.

whether or not it's feasible to run massive long-term deficits is somethign I have a feeling we are going to find out anyway, stimulus or no stimulus. .

 

Just spending wasn't my argument ever in this thread. I think you misunderstood my meaning, which would be easy to do considering my early posts were fairly vague in my thinking.

 

This seems to be the only logical argument against the stimulus that I can come up with that I haven't seen directly rebutted by proponents of the current bill. It's not convincing enough, though, because I haven't seen it anybody give the detailed reasoning behind it either. Right now I believe the administration when they say that it is worth the risk (mostly because they're reasoning has seemed most logical on other issues).

My question to supporters and opponents of the stimulus package is why is it safe to accumulate all this debt or why is it not?

 

I don't think anyone's advocating debt for debt's sake. It would be better if we didn't have debt. However, given our current situation, taking on more debt created for purposes that advance the country both short and long term is preferable to standing still and watching the economic crisis destroy everything.

 

Of course. And that is my thinking as well. But it doesn't answer the question, unfortunately.

There has to be a point at which taking on too much debt will be counter-productive, even in the midst of this crisis. The question is what is the logic behind democrats (and the economists they listen to) saying that the stimulus bill hasn't reached that point and republicans apparently saying it has? Hopefully there is some valid reasoning behind those positions beyond just gut feel.

 

All the testimony from the Congressional Budget Office I have seen they always say that the debt is the biggest threat to our economy.

We cannot really pay this off in 10 years or so and if it gets to the tipping point the changes will be much harder than if we pare it off slowly.

 

Ok, but now the opposite question should be asked. Is that concern really greater than the concern over the current state of the economy, and more importantly, if so, why?


All I keep hearing is that either:

A. The economic crisis is so bad that we have to go into more debt in order to get out of it.​

or

B. Going into a lot of debt is very bad.​

Either or both might be valid arguments, but I'm looking for the reasoning behind them. The first one sounds more reasonable to me because it goes a step beyond the second, but that's really not much to hang an opinion on.

 

The Dem argument seems to be that our economy will lose $2 trillion per year in output if we don't have a big enough stimulus (not possible any longer to stimulate with lower interest rates and tax cuts are not as stimulating). If we don't lose the $2 trillion per year we can pay the cost of the stimulus back by the continuing growth.

I suppose you could argue that a $2 trillion per year decrease in GDP would not be worth a say $10 trillion stimulus, but a $1 trillion or less stimulus?

 

The simple logic on the Democratic side is that if we fall into a depression and the economy shrinks by 7-10%, then we're going to have falling tax revenues and higher social welfare expenses and will accumulate even more debt than the stimulus package in the long run.

The simple logic on the Republican side is that the economy will rebound on it's own without the stimulus and therefore the debt is unnecessary.

The problem is there's no way to know in advance.