Just to clarify - extending unemployment benefits is not meant to be the answer to unemployment rates. It's just to keep things from getting worse. The other part besides confidence for people to spend is that they have to have disposable money. As a society, we've been living with zero/negative savings rates for a long time now, so even income coming in isn't necessarily disposable right now. So part of this is simply a process - people have to rebuild their balance sheets and pay off debt rather than spend. While that's a bad thing for the economy now, it's a very good thing for the economy in the longterm. We got into this mess over a very long period of time - it's going to take time to repair that damage. Unfortuantely, there's not really a good way around that problem.
I agree with this statement. With the debt burden having to be paid off we will see lower rates of growth in the Gross/El-Erian 'new normal' mold for some time. This growth however will be more sustainable than before and there will be a wider gap between better run companies and those that have gained market share by leveraging and not attaining growth at a reasonable price. While I agree with this notion, we need to allow business and innovation to continue and give small businesses the flexibility to survive during this environment. We shouldn't be raising any taxes or costs or having this hang on their heads that it will happen in the future. This dis-incentivizes them to hire and spend when we need those jobs. Though they are not cutting government programs, they are raising taxes at the worst possible time which prolongued even the great depression. Now is not the time to be concerned with deficits and I still believe that enabling the machine of American business to succeed will do more than less efficient government spending. We capitalized the banks to increase liquidity, but we shamed them into giving it back too quickly. Though not as bad I fear a Japanese style 'zombie' bank situation in which these institutions aren't dead or alive but just hovering trying to stay afload (or waiting for the real estate market to turn around!). Give entrepreneurs, spenders and all a break and allow them to use discretionary money towards innovation and not taxes. I guarantee the multiplier will be moreso than governments use.
The problem with tax breaks is that they can't be controlled. You have to either make them temporary or permanent. If temporary - as the Bush 2001 tax cuts supposedly were - then whenever it comes time to remove them, everyone claims its raising taxes and will destroy the economy. If you remove them in good times, everyone will say it will end the expansion and the party doing it will take the blame for whenever the next natural slowdown comes. If you make them permanent, you just create a worse situation - you can't lower taxes forever so permanent tax cuts are not a viable mechanism for stimulus. I have yet to see a rational proposal offered to cut taxes that is fiscally responsible and addresses those problems. The only option I would really see as acceptable would be a one year cut that comes with gradual increases each year going forward until you get to your target - but then you have taxes increasing every year which just gives politicians exciting talking points.
Month after month the numbers reflect the same thing over and over again, and what do we do on this board? Turn the debate into all out war of ideologies, capitalism vs socialism vs marxism vs communism. Why can't we admit that after burning through trillions of dollars in stimulus, our economy is still no where close to recovery?
Or maybe admit that instead of the government spending more, we need to empower business and people. I imagine the multiplier on government spent money (going through subcommittee after subcommittee ) is far less than letting business keep more of what they make to hire and not let go of people. We've spent trillions of dollars and the unemployment rate is only going up. We need to re-visit our methods.
Agreed on the first part, but my point is its not helping...each person gets what, $1500/mo or so in unemployment...that money is then spent for things like rent, groceries, etc...much more spending is needed to induce hiring...also, debt is not a priority to most, its survival... To truly stimulate growth and spending, business have to feel assured of real growth and then they will hire people...since current spending is not doing that, the other option is tax incentives...even temporary ones can help give the "kick" the economy so desperately needs...I'm not economist but I do know that everything to this point isnt working and we better do something quick...
so boring.....you know this is false, now andygladiator or major or rockets judoka somebody is going to come in and bash you with facts - why is this any fun? And further it doesn't have anything to do with running a business? That is why I come to this site in the first place - to learn how to actually run a business.
Maybe one day you will. Or have a part in hiring and/or firing people instead of editorializing from a soapbox. You understanding what i'm saying is like me trying to explain to someone that has never had chocolate what it taste's like. Stop with all the rage and bitterness. If you have dreams go for it and don't blame a system for it. So many people are bitter at business owners and entrepreneurs because they think 'i'm sooo much smarter than you so how are you richer than me?'. "And then one day you find ten years have got behind you No one told you when to run, you missed the starting gun And you run and you run to catch up with the sun, but it's sinking Racing around to come up behind you again The sun is the same in a relative way, but you're older Shorter of breath and one day closer to death" Time by Pink Floyd. Seize the opportunity instead of the bitterness Sam.
But that's the most efficient multiplier. When you give people money where they will spend 100% of it, that's an efficient way to pump money into the economy. But again, the primary reason for extending unemployment benefits isn't to stimulate, but to prevent homelessness, additional stress on other social services, etc. Tax incentives are not the issue here. Corporations had record profits and record cash levels this past year. Cutting their taxes so they have even larger profits isn't going to make them hire. They are just sitting on cash because that's the smart play right now - if record profits and cash levels aren't enough to make them hire, what makes you think even larger profits/cash levels would do it? They aren't hiring because there is simply no need to hire. They can handle all their current demand with their current workforces. Giving them more money doesn't change that. It just accumulates debt for no good reason and then freaks everyone out when you raise taxes back up. What evidence do you have that it's not working? We were on a cliff to a depression and now we're not. The fact that we didn't quickly come out of the worst financial crisis in 50+ years is not evidence that current strategies are not working. The fact is that the problems we created are huge and there is a time element to fixing it. The economy is already growing, albeit slowly, which is about as much as anyone should rationally expect.
So the debate went from unemployment to capitalism vs socialism and then it moved to SamFisher and Rocketman1981 fighting like children over who is the better keyboard economist. Please continue to debate senselessly over non-related issues while more and more Americans struggle to find a job. I find it surprising that every single poster who was actively deconstructing the previous administration failed policies is now too busy ignoring the current regime's failures. We are closing upon almost two years of the same failed initiatives and no one is willing to acknowledge the fact that our economy is going to remain stagnant and unemployment will remain unchanged for the foreseeable future. I wish some people showed the same kind fervor they demonstrated three years ago.
At what point do you cut it off? Living off the government long term is not acceptable, regardless if you can't find a job. If a person becomes unemployed, they need to cut back significantly. Are you opposed to the government putting people to volunteer work after a certain amount of time if they collect unemployment?
I'm not sure - but until the job market creates a situation where's it possible to find jobs, I'm OK with extending it. I do agree that people need to cut back in that situation, but I imagine they do. It's not really a voluntary alternative to having a job. I'm not sure how the system works, but in theory people are supposed to demonstrate active job searching. But yeah, I have no problem requiring something like volunteer work in exchange.
LOL - you obviously haven't read any of the posts in this thread. There is not a single post of mine that is about economics. Nor of this dude's (whoever he may be). If you read it, you'd know that economics are not really relevant to this thread. When he was a boy, do you think Michael Buffer began by studying supply and demand? LOL - he did what ivory tower wannabes want to do, and started his own business. He started off playing in the small shows, hard work and innovation eventually paid off. Do you think somebody just handed him "Let's get ready to rumble"? LOL@U for arguing otherwise. Today he is the most recognized voice in announcing, having announced thousands of championship fights and other events. He is quite simply among the greatest businessmen of our time.
Sam you're not adding anything constructive either to this debate over unemployment. Do you have anything to say at all beyond trying to put down others in terms of who is the smarter overall businessman? Please keep that kind of childish arrogance to your personal circle. Nobody here gives a damn about your self-proclaimed superior talent of running a business. Again, I ask you to state anything meaningful on unemployment or at least acknowledge that the course of action taken by the current administration is doomed to fail. It's about time people recognized the failed policies of the current administration before we sink further into despair or the economic equivalent of "no man's land." Two years of record unemployment hovering around 10% and yet we still can't reach a consensus on how spending a trillion dollars in stimulus hasn't done a damn thing to provide sustainable jobs and economic recovery. The delusion here is beyond imaginable where people who were once rational and intelligent on this board, are now in denial and blatantly biased along partisan lines.
What exactly have you contributed to this thread? Why? 10% unemployment is not record unemployment. And where is your evidence that it hasn't done a thing to provide jobs? Where is your evidence that, in the absence of the stimulus, things would be the same as they are now?
Please explain specifically what the current administration has done that is the same as the previous. TIA.
