JBurkett laid it all out here. I agree with his post, 100%.
FWIW, I’ve **never** advocated the way they handled the “financial crisis,” and am very opposed to debt, as a general rule. Debt should be used almost exclusively for business expansion where there is adequate demand for goods and services. Debt should not be used for consumption, with the exception of large purchases like houses or cars, and even then, it should be carefully used, and the interest rates should adequately reflect the default and interest rate risks of these loans (I’m opposed to debt derivatives, especially if they are not publicly exchanged, because they tend to hide the price of these risks).
You and I disagree about what drives an economy, though. You seem to subscribe to the supply-side theory, and I’m a demand-sider. IMHO, you can supply all you want, but if there is no demand, the economy will colapse. It’s much easier to ramp up supply than demand, IMHO.
Also, I have yet to see a correlation between low tax rates and job growth. This country’s most prosperous period also saw it’s highest tax rates. The period before the Great Depression had very low tax rates, and the period before this recession/depression had very low tax rates. IMHO, low tax rates, especially when taxes on passive income are lower than taxes on wages, cause dangerous boom/bust cycles, accelerate the growth of the income/wealth gap, and destabilize the economy.
The artificial manipulation of housing and asset prices, as well as interest rates is something I’ve railed against from the beginning. This was trillions of dollars that was very foolishly spent, and brian and I have disagreed about it from day one.
IMHO, concentrated power and wealth is NEVER good; whether it’s concentrated in the government’s hands via communism, or if it’s concentrated in the hands of a few capitalists via capitalism, it will always end in bloody revolution. I believe that the most successful economies are ones where there are enough checks and balances, so that fraud and corruption — the things that destroy all economies and civilizations — are kept to a minimum. I’m a hybrid socialist, because I believe it’s the only way to ensure no one group amasses too much power. The concentration of wealth always ends up badly, and capitalism is not superior to communism in this regard.
[quote=JBurkett19]Some of what you say about gov’t spending is true, but I think you’re forgetting about instances where gov’t spending actually does something for our national economic growth. Examples where gov’t spending increases our capacity to grow are in infrastructre, science, education and research/development. All of these things are major drivers for our positive economic future. They are also ways to employ people in meaningful ways. Where would we be without NASA? Where would we be without roads, airports and bridges to move commerce? We would also be in a world of hurt if goverment didn’t fund scientific research and education as well. All of these things are in areas where private enterprise would not get involved until (or unless) there is profit to be had.
I am in agreement that much of the government spending we had under our President’s stimulus package was misdirected. I think, as you do, that keeping people on the payroll simply for the sake of putting money in people’s hands isn’t productive in the long run. But, building roads, airports and rail to move goods, is extremeely beneficial to not only the worker doing the job, but to the economy as a whole. Also, employing scientists to do research, or providing money to universities for education and research are all part of gov’t spending and have shown to pay huge dividends.
What we nned to do is focus on what we know and what we’ve done right over the last 75 years. We need to continue building our education system, so that people from around the world come here to discover and develop. We also need to take the initiative to continue expanding our infrastructure. We are a devloped nation that needs to continue develop through infrastructure, science, medicine, R & D, etc.
Now, as far as private business goes, we need to get back to manufacturing. Get folks working to make things. Making things, is what ultimately saves our human essence. We gave loads of money to the banksters to prop them up. Now they need to take some of the profits they’ve made by borrowing at .25% and buying treasuries that pay 2-4% and get things going. Too many players are holding on to money, so that they feel more comfortable, when the movement of that money could be employing some folks through investment in real projects.[/quote]
