WI: Larger Stimulus passed in 2009

Wallet

Banned
In 2009, Congress passed a $787 billion spending bill to prevent a depression and jump start an economic recovery. Later additions made it $831 billion. Most economists agreed it prevented more job losses and helped the economy recover. But at the time there were concerns at the cost. President Obama wanted to spend more but nervous congressman limited it slightly.

Some people were even talking about a 1 trillion dollar stimulus. What would occur if the much larger package passed? Or even a 1.3 trillion stimulus as one senator proposed?

I'd say a much faster economic recovery. President Obama wins reelection in a landslide. I doubt Mitt Romney would even run. Someone like Rick Santorum wins the GOP nomination and losses even more.

But it would be hard to pass. Democrats needed 60 votes to remove the filibuster. 3 GOP senators agreed to vote for it, but only if it was less then 800 billion. Maybe if Al Franken wins clearly and Democrats win close races in Georgia and Kentucky. (Maybe Democrats win in Tennessee in 2006)

Another question is how does this effect ATL Obamacare? More Democrats in the Senate means Universal Healthcare (public option) passes. But some senators must be hesitant to pass this with a larger spending bill.
 
I'd fear larger debt, and overheating the economy. The recovery has been slow but very long running. As a business owner I personally prefer the stability. I went thru the inflationary 1970s, & a more subtle form post 1995. The dialed down price inflation of the past decade is appreciated.
 
I'd fear larger debt, and overheating the economy. The recovery has been slow but very long running. As a business owner I personally prefer the stability. I went thru the inflationary 1970s, & a more subtle form post 1995. The dialed down price inflation of the past decade is appreciated.

Credit busts are inherently deflationary. There was never any risk of inflation while banks and people were dealing with their depleted balance sheets and credit ratings. It kills the money multiplier (people save/pay off debts) rather than spend. Inflation isnt/wasnt going to be an issue until that fully resolves itself.
 
Credit busts are inherently deflationary. . .
Yes, I think deflation was much more the clear and present danger in Sept. and Oct. 2008.

And yet, about the time Pres. Bush signed the first stimulus bill early Oct. ‘08, some “pundits” on TV talked about the dangers of hyper-inflation. Well, this resonates with people because the most vivid economic image a lot of people have is wheelbarrows full of money during the German hyper-inflation of the 1920s. And I’m not sure if there are as gripping and as immediately explanatory images about the Great Depression. There’s a classic photo of a woman looking afar and appearing worried during the dust bowl, but that’s a natural disaster, and I would argue does not give an immediate visual image of an economy slowing and in downward spiral.

Plus, I think some conservatives wanted to shift the center of gravity of the discussion. And then, hyper inflation just makes a good scare story a la a Stephen King novel.
 
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Thats been going on since the 1970s, wage shrinkage & all that. . .
And how in the world do we build a healthy society in the face of this ? ! ?

So, of course the body politic is going to thrash about like a wounded animal. I remember the issue of illegal immigration came up around 2006, and one guy (Tom Tancredo?) tried to make it a major issue in his 2008 presidential bid. And of course, this was the issue Trump rode all the way home in 2016. And yet, illegal immigrants from Mexico has relatively little to do with the long and slow erosion of middle class jobs and there was nothing really new about it in 2016. To me, it looked just like classic scapegoating. And otherwise intelligent people fell for because they were so pissed off and frustrated, and didn't know what else to do.
 
. . . The problem my peers & I have been wrestling with the past couple years is a shortage of skilled labor.
I compliment you on having my own business. It's one of the dreams I have. 80% of new businesses fail within the first year or two. Yes, 8 out of 10 fail. I always like to put that stat out there, lest people think it's easier than it is.

All the same, let me respectfully challenge you thusly, what ungodly level of skills and experience are you looking for and at what level of modest wages? ;)
 
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I'd fear larger debt, and overheating the economy. The recovery has been slow but very long running. As a business owner I personally prefer the stability. I went thru the inflationary 1970s, & a more subtle form post 1995. The dialed down price inflation of the past decade is appreciated.

Credit busts are inherently deflationary. There was never any risk of inflation while banks and people were dealing with their depleted balance sheets and credit ratings. It kills the money multiplier (people save/pay off debts) rather than spend. Inflation isnt/wasnt going to be an issue until that fully resolves itself.

This. A much larger, immediate stimulus wouldn't have created substantial or noticeable levels of inflation and you certainly wouldn't have overheated the economy. It takes a very specific set of conditions for large-scale economic spending to overheat economies that usually involves extended time, export-based economies and lots of other particulars that simply didn't exist for the United States in 2008. Overheating also tends to happen to countries who are not in control of the world's dominant reserve currency and de facto grease that makes the global economy spin.
 
All the same, let me respectfully challenge you thusly, what ungodly level of skills and experience are you looking for and at what level of modest wages? ;)

In my case the sort of skills you master in a two or three year apprenticeship program in the construction trades. Or, maybe 5-6 years OJT with a average non union company in that trade. Underlying the is the ability to make it to work on time each day and to organize your life so that 'emergency' departures midday are not a weekly occurrence. Someone whom I don't have to stay on the job site and supervise forty minutes of every hour, and someone who I won't find using drugs on the job site when I return from lunch. All that for a carpenter or to use a antique term: millwright, is worth a wage of $18 per hr to start, tho when the overhead is added in the real cost is closer to $25 per hour & the average residential customer has heartburn accepting cost estimates based on that labor rate, never mind the cost for plumbing & electrical work. Indiana has a fairly low labor cost relative to other midwestern states.

For the construction labor we are sifting through the dregs of the education system for capable people who are not in college after a academic degree in engineering, liberal arts, business, or whatever. Its been twenty years since I left manufacturing management so I'm not up to date what the local pay is. Friend who retired a few years ago wad compensated in the $60k a year range for maintaining low voltage and digital control equipment in a grain processing plant. As a production operator there he'd have been making ten to fifteen thousand a year less, but with similar knowledge requirements, just less responsibility. Even the guy who cleans the floors in that plant was responsible for keeping $60,000 worth of cleaning equipment running.

Thats the way it is in most of the manufacturing around here. Caterpillar Arconic, Lafayette Instruments, GM, ect... hire people with 2-4 years technical training and proven track records in reliability. There's a few places that still use indifferently educated rote laborers. The meat packing facilities, some labor in the Subaru factory, Wabash National that uses antiquated methods for building multi axle trailers. Those places are likely to be heavily automated as well in the next couple decades. If you don't have the skills and cognitive ability to run expensive manufacturing machines you had better be really good at selling insurance cause the traditional factory jobs of the 20th Century are fading fast.
 
https://www.theatlantic.com/business/archive/2012/01/how-the-stimulus-shaped-the-white-house/251823/

In a secret memo sent just after the election, Larry Summers offered Obama four illustrative stimulus plans to boost the economy, worth $550 billion, $665 billion, $810 billion, and $890 billion. Even the largest of these plans would fill hardly half of the lost productivity in the economy, which economists have sized at $2 trillion. But Summers told the president that it wasn't economically desirable or politically feasible to try to fill the hole entirely...

"An excessive recovery package could spook markets or the public and be counterproductive," he wrote, and added that none of his recommendations "returns the unemployment rate to its normal, pre-recession level. To accomplish a more significant reduction in the output gap would require stimulus of well over $1 trillion based on purely mechanical assumptions--which would likely not accomplish the goal because of the impact it would have on markets."

And so the battle lines were drawn, with Summers and Peter Orszag calling for stimulus restraint and Christina Romer, the incoming chairman of the Council of Economic Advisers, leading the charge for a stimulus bill worth more than then $800 billion. When Romer tried to move the stimulus conversation toward $1 trillion, Chief of Staff Rahm Emanuel reported responded: "What are you smoking?"

https://newrepublic.com/article/100961/memo-larry-summers-obama

What happened? When Romer showed Summers her $1.7-to-$1.8 trillion figure late the week before the memo was due, he dismissed it as impractical. So Romer spent the next day or two coming up with a reasonable compromise: $1.2 trillion. In a revised document that she sent Summers over the weekend, she included the $1.2 trillion figure, along with two more limited options: about $600 billion and about $850 billion.

At first, Summers gave her every indication that all three figures would appear in the memo he was sending the president-elect. But with less than twenty-four hours before the memo needed to be in Obama’s hands, Summers informed her that he was inclined to strike the $1.2 trillion figure. Though Summers, like Romer, believed more stimulus was almost unambiguously better, he also felt that a $1.2 trillion proposal, to say nothing of $1.8 trillion, would be dead on arrival in Congress. Moreover, since Obama’s political operatives were convinced that any stimulus approaching a trillion dollars was hopeless, Summers worried that urging more than this amount would stamp him and Romer as oblivious in their eyes. “$1.2 trillion is nonplanetary,” he told Romer, invoking a Summers-ism for “ludicrous.” “People will think we don’t get it.”

https://krugman.blogs.nytimes.com/2010/07/28/how-did-we-know-the-stimulus-was-too-small/

In practice, it was even worse, because one of the key elements of the plan — aid to state and local governments — was cut back sharply in the Senate. We ended up with only about $600 billion of real stimulus over that two-year period.

quote-in-the-history-of-the-world-no-one-has-ever-washed-a-rented-car-lawrence-summers-28-71-79.jpg
 

FBKampfer

Banned
Honestly, I think it delays bumping into reality. Sure, maybe it staves off "the great recession" and people get to keep their mid level jobs. Good for everyone that currently has a job, but hardly important for the overall long term health of the economy.

I'd say it butterflies away Bernie Sanders' 2016 run, the focus on economics is greatly lessened, and generally the boat just doesn't get rocked quite so hard while it's slowly taking on water.


People needed the slap in the face. And if recent elections are any indication, they're going to need a kiss with some brass knuckles to get them moving next time around.
 
. . . For the construction labor we are sifting through the dregs of the education system for capable people who are not in college after a academic degree in engineering, liberal arts, business, or whatever. . .
Might you be open to hiring one or two employees who are 'spectrum'? or if not someone flatly on the Aspergers-Autism Spectrum, someone who is different. And often people who are spectrum like social interaction just fine, only in smaller doses.

You would probably have to tell another crew member something of the sort, Roger is a good worker, just different. He likes other people just fine, only in smaller doses. I don't want to see you giving him any shit.

And I understand you have to hire the existing people coming out of apprentice programs or longer stints with companies in the area. And I'm always amazed at how similar everyone hired by a particular company is. For example, maybe the company wants to hire quote 'regular guys' who socially drink on the weekends, and this heavy drinking on the weekend seems to inevitably spill over during the week.

And can you perhaps relax your standards on smoking weed? And I say this as someone who has just smoked with a couple of girlfriends. But what I observe, weed is quite a bit less harmful than alcohol.

Another possibility, which would theoretically hurt me since I'm a good agnostic, would be to be open to hiring a devout Christian, who might be a little stiff but who's less likely to be a big drinker or user. At least in theory. Ample exceptions to the contrary, people are just endlessly complex!
 
Honestly, I think it delays bumping into reality. Sure, maybe it staves off "the great recession" and people get to keep their mid level jobs. Good for everyone that currently has a job, but hardly important for the overall long term health of the economy. . . . People needed the slap in the face. . . .
Are you talking about what I've heard called the "debt crisis"?

And which I think very ambiguously can refer to either governmental debt or to private debt such as home mortgages which can then be rebundled into "credit default swaps."
 

FBKampfer

Banned
No, I'm talking about the 40 year decline in wage growth, cost of living increases, extortionate medical care, skyrocketing education costs, and ballooning personal debts, all of which reduce the number of people, and their capabilities to participate in the areas driving employment.

But when the banks fucked up and got caught making dodgy moves for the sake of their own profits, it drew attention to the fact that this was some common-ass shit in our country.

Probably the biggest reason Mitt Romney lost in 2012 was the fact that he was an unapologetic businessman.

We realized that our kids simply weren't going to have the same opportunities as us, before they had to run into that fact first hand (although we promptly bungled any opportunities to fix the problem).


Frankly the best thing we could do for the overall long term health of the economy is to form lynchmobs and go on corruption and trustbusting witch hunts.
 
Might you be open to hiring one or two employees who are 'spectrum'? or if not someone flatly on the Aspergers-Autism Spectrum, someone who is different. And often people who are spectrum like social interaction just fine, only in smaller doses.

Well, in my life assorted doctors have declared me suffering from Neural Motor Retardation, Dyslexia, Ausbergers, & whatever the maladly du jour might be. So I guess I qualify in that regard. But, I have for decades gone a step beyond and placed women on my work sites, even having teams entirely of women, and making a 22 y/o college drop out a business partner. One finds talent where one finds it.

And I understand you have to hire the existing people coming out of apprentice programs or longer stints with companies in the area.

I have had to avoid much training time in recent years. I used to have enough margin I could afford training cost, but thats greatly reduced.

And can you perhaps relax your standards on smoking weed? And I say this as someone who has just smoked with a couple of girlfriends. But what I observe, weed is quite a bit less harmful than alcohol.

Theres a can or worms in legal, insurance liability, work efficiency that I won't go into right now.

Another possibility, which would theoretically hurt me since I'm a good agnostic, would be to be open to hiring a devout Christian, who might be a little stiff but who's less likely to be a big drinker or user. At least in theory. Ample exceptions to the contrary, people are just endlessly complex!

I ran across a entire painting crew who were Cristian fundamentalists. Generally tho I don't see many turn up among the applicants. They are aiming for employment somewhere else.
 
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Frankly the best thing we could do for the overall long term health of the economy is to form lynchmobs and go on corruption and trustbusting witch hunts.

Two years ago I interviewed a former Wall Street bond salesman/trader. Worked in New York & rode the wave right up till it hit the cliff face in 2008. In 2015 the social service worker who referred him to me found the guy living under a bridge in the midwest. I took what small satisfaction I could out of that wretched story.
 
The trick to getting a bigger stimulus was to structure more of it in the form of a tax cut and defense spending which the Republicans would have difficulty opposing. So we do the 2016 corporate tax cut and a one time individual tax break and some reforms like eliminating the marriage penalty and we also increase defense spending to modernize the military and add a division to the army and a carrier group to the navy. Obama also ramps up earlier in Afghanistan and Iraq. The total net stimulus is around $2 trillion although it does not kick in all at once.
 
Are you talking about what I've heard called the "debt crisis"?

And which I think very ambiguously can refer to either governmental debt or to private debt such as home mortgages which can then be rebundled into "credit default swaps."

Federal government debt is a problem only in so far as it precipitates inflation and in 2009 that was the least of our concerns. Otherwise, the federal reserve can simply create new money and buy treasury bonds which is essentially "monetizing" the debt - in plain English one part of the government prints new money and lends it to the other part of the government. Private debt is a completely different issue.
 
No, I'm talking about the 40 year decline in wage growth, cost of living increases, extortionate medical care, skyrocketing education costs, and ballooning personal debts, all of which reduce the number of people, and their capabilities to participate in the areas driving employment. . .
And compare this to the period from 1945 to approximately 1970 when the U.S. middle class was growing and people felt the future was open and positive. I mean, those magic 25 years or so!

PS if we invent journalism, which I feel we have to, we won’t need lynch mobs
 
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