Great Recession

[JayHawk]

SO although the system is working you see ZERO inefficiencies to be corrected in those departments?

I mean really?

I believe the military works like a finely oiled machine when employed properly. However I will be the first to admit that we could save billions.

 

[T-Rexx]

^ Claiming that government can be made more efficient is silly. Is there any human thing that cannot be made more efficient? Does one not reach a point at which spending so much effort trying to improve efficency becomes an inefficiency in itself?

You talk exactly like Herbert Hoover. He was a big proponent of the Efficiency Movement (1890-1932). He said that government was full of waste and inefficiency, and he was going to fix it!

Hoover, a trained engineer, deeply believed in the Efficiency Movement, which held that government and the economy were riddled with inefficiency and waste, and could be improved by experts who could identify the problems and solve them. When the Wall Street Crash of 1929 struck less than eight months after he took office, Hoover tried to combat the ensuing Great Depression with volunteer efforts, none of which produced economic recovery during his term. The consensus among historians is that Hoover's defeat in the 1932 election was caused primarily by failure to end the downward economic spiral. As a result of these factors, Hoover is ranked poorly among former US Presidents.


http://en.wikipedia.org/wiki/Herbert_Hoover

Cutting budgets of government programs does not make them more efficient. It just means the program gets smaller, and does less.

 

[BostonPirate]

Interesting thread.

Many things to consider.

The recession was not a depression because it did not meet the criteria for what a depression is. A ten percent decrease in GDP sustained for three quarters.

I don't have time for much internet posting at this point, but someone sent me a message asking me to post an opinion here. I disappear and work 100 hour weeks here and there and then things slow down for weeks. THere is A LOT of conflicting data in a host of new reports. By most older models this quarter should have been a modest recovery, based on this quarters corporate net profit reports. around seventy percent of all corporations made not only huge profits, but many record breaking profits.

At the same time, they have released reports stating that due to the low consumer spending and reduction in manufacturing need and reduction in actual manufacturing, which had a substantial drop this last month, they will be making substantial layoffs.

A huge chunk of the recovery money is now in the hands of the corporations, and if this cycle is not broken within THIS QUARTER, the results are wildly unpredictable, but to be sure, we are all just arguing over how bad its going to get, not when or IF its going to get bad.

That 10 percent is very possible by two quarters out, or within six months time, if my model is correct.

The Itch seems to be in the political effect, and I had alluded to adding the Poltical atmosphere as an economic modifier for the remaining term of this House of Reps session, through 2012. Most economists are now doing this and forecasts are about to change drastically in about two months.

The cuts, without revenue, are going to take out about 4 trillion out of the economy. For every dollar the gov't cuts in spending, 1.5 dollars is lost out of the economy.

To be blunt.... Taxes need to be raised. The only recovery model that has shown real success from a depressed or recessed economy is an elevation of taxes on the top ten percent. This has become a political impossibility now, even though 75 percent of americans want the increaseand understand what is at stake.

I would say initial chatter as we all review the data is that IF, and I stress IF really strongly, IF the Gov't does not intervene, and overhaul the tax code SUBSTANTIALLY, it is more likely than not that we will see four to five quarrters of a receding economy, (one year to one year three months, starting NOW. we wont know for sure for a month.

We are receiving back chatter that Fitch is going to downgrade the USA rating to AA+.

That will raise variable rate loans throughout the nation by about 1.5 percent. Homeowners will take the biggest hit, and small business will feel it drastically.

Bottom line... trillions of dollars taken out of circulation, and inflation across the board, possibly by 3 to 5 percent.

Follow the money. This is what Wall street is being advised of, and I would only say that Gold is not a bad idea at this point.

 

[JayHawk]

^ Claiming that government can be made more efficient is silly. Is there any human thing that cannot be made more efficient? Does one not reach a point at which spending so much effort trying to improve efficency becomes an inefficiency in itself?

You talk exactly like Herbert Hoover. He was a big proponent of the Efficiency Movement (1890-1932). He said that government was full of waste and inefficiency, and he was going to fix it!




Cutting budgets of government programs does not make them more efficient. It just means the program gets smaller, and does less.

That depends entirely on the cuts. How they are made and to what effect.

YOUR experience is that cuts are made drastically and ineffectively. But at this point your talking out of both sides of your mouth. You ridicule the idea that efficiency can be found as amazingly obvious to any breathing person... then say it is impossible to do.

So which is it?

 

[T-Rexx]

The recession was not a depression because it did not meet the criteria for what a depression is. A ten percent decrease in GDP sustained for three quarters.

If you're going to insist on technical definitions, then we are not in a recession, either. The recession officially ended during the summer of 2010.

These are economic boom times.

 

[BostonPirate]

If you're going to insist on technical definitions, then we are not in a recession, either. The recession officially ended during the summer of 2010.

These are economic boom times.

hence the rest of my post...

but you knew that.

what amazes me is why we are hung up on this definition. It stops us all from addressing the issues at hand that need to be fixed and spooks the consumers.

 

[T-Rexx]

You ridicule the idea that efficiency can be found as amazingly obvious to any breathing person... then say it is impossible to do.

So which is it?

It is both, of course.

It would be theoretically possible for me to increase my efficiency of petroleum use by walking everywhere. I happen to live within walking distance of most of the necessities of life. But, practically speaking, it is not really possible to live that way. There would be too much stuff to carry, there are not enough hours in the day, local sources may be too expensive, etc.

So, it is both theoretically possible and practically impossible for me to be a more efficient user of gasoline.

That's not a contradiction. That's life.

But life is not something Republicans seem to understand very well.

 

[JayHawk]

Oh I get that things may not be practical.

However you insist that the government run programs of Medicare and Social Security are without any efficiencies to be found?

What they need to do is hire change management professionals for the government. Then analyze the processes and suggest efficient changes. THEN most importantly sample the effectiveness of your changes and adjust. Simple change management. I bet the government employees would identify thousand of cost savings if ask in seminar type formats.

Nobody would do that because it would take effort and would make sense.

 

[T-Rexx]

What they need to do is hire change management professionals for the government. Then analyze the processes and suggest efficient changes. THEN most importantly sample the effectiveness of your changes and adjust. Simple change management. I bet the government employees would identify thousand of cost savings if ask in seminar type formats.

Nobody would do that because it would take effort and would make sense.

Again, that is exactly what Herbert Hoover said (see the links above).

For at least 121 years, Republicans have been insisting that they will fix all those government programs that have been working so well. Can you name even a single Republican success in this regard in the last 121 years?

I didn't think so.

 

[JayHawk]

That is because they have never cut these programs.... NEVER.... try the idea that we are broke first and then move forward with cuts and you will find places. I love the idea that Democrats and Republicans have been protecting each of their cherished projects for so long that it must mean it cant be fixed.

Ignorant to why it hasn't been fixed is what that is.

You demand I name a fix... feel free to name a suggested program of fixes that was accepted by the parties on either side.

Thought so.

 

[T-Rexx]

^ "Cutting" a program is not making it more efficient.

It just gets rid of whatever the program was doing, or reduces its scope.

Beware of politicians who offer you everything you've already got now, but for less. Republicans (and Democrats) having been promising that literally for centuries, and have yet to deliver. When something seems too good to be true, it usually is.

 

[T-Rexx]

....in order to get out of this recession, somehow they're going to have to go back and recreate "demand".

Plain and simple.

The basic problem is that too much money has been removed from the middle class over the past three decades by Republican tax policy. "Reaganomics" (making the rich richer) has been a spectacular failure. It damages the economy profoundly because rich people are not the drivers of the American economy - the middle class is.

The reason that collapsing prices did not lead to increased spending during the depression (what all the economists said would happen) is that the middle class no longer had any money to spend. Too much of the money supply had become concentrated in the hands of too few rich people. We have the same situation today. The middle class no longer has money to fuel the American economy. The wealth gap has become too wide. Alarmingly, the wealth gap today is greater than it has ever been in American history, with one exception - the Fall of 1929.

This is a fundamental structural problem. That means that the sluggish economy is going to persist/worsen until the structural problem is fixed. If the structural problem is never fixed, the economy will never recover. Period.

And, alarmingly, no one is even talking about fixing that. And half of our legislators are dedicated to making sure the problem gets worse. And our president is inclined to let them.

 

[JayHawk]

^ "Cutting" a program is not making it more efficient.

It just gets rid of whatever the program was doing, or reduces its scope.

Beware of politicians who offer you everything you've already got now, but for less. Republicans (and Democrats) having been promising that literally for centuries, and have yet to deliver. When something seems too good to be true, it usually is.

Oh I see so besides the really whacked out TP which group is advocating complete cuts and removal? I know the loons talk about it but have yet to see a republican platform or bill that meant to remove or "cut" the programs...

 

[T-Rexx]

Oh I see so besides the really whacked out TP which group is advocating complete cuts and removal? I know the loons talk about it but have yet to see a republican platform or bill that meant to remove or "cut" the programs...

Perhaps you missed the news this past week.

Congress just passed a debt ceiling agreement that will lead to $2.1 trillion in spending cuts over the next ten years.

 

[JayHawk]

Right on SS and Medicare AND the military.

AND what I am saying is that we need to find efficiencies and cut where necessary. the Goliath called the US Military has been doing their research for the last ten years and downsizing the hugest chunk... PEOPLE.

You of course claim it is impossible while also saying something about the sky falling. .....

It is possible to make process better. Because you have never seen it occur doesn't mean it can not.

Cutting a program or discontinuing the program is entirely different than trimming its fat.

Is 2.1 trillion the total budget for those programs? Did I miss that part?

 

[T-Rexx]

^ We're gonna cut your base pay by 29%, Jay, but it won't affect you one bit.

You'll find ways to use your money more efficiently.

 

[JayHawk]

Yeah I guess your right no way to fix it. SO since it will be broken to the point of useless we might as well save 6.3 trillion and just cut the entire program out of existence.

Budget Balanced.

<dust hands off>

 

[Tengilethos]

This is a "design feature" of your political system. It is as difficult to end legislation/programs as it is to get them passed in the first place.

 

[BostonPirate]

I think the backlash that the GOP is facing right now is entirely due to the fact that they speak the language of big goverment social engineering, and the normal people speak from a common sense perspective.

To normal tax paying americans means Cutting waste, means getting rid of overtime, freezing salaries until the economy recovers, reducing redundant computer systems. We want a more effective management style.

But if you remove a program that they depend on for an expected quality of life to the point that it no longer functions, for ideological reasons, you miss the point of what a normal conservative mind considers "reducing costs".

People still want their fruit inspected. They just want the division run more efficiently from an operational perspective. We have all had to get licenses or permits, and its maddening to see a gov't employee work at the speed of snail when you are jumping through hoops and dashing to your second job.

Medicare, medicaid, and social security were created because the costs to society of NOT having these programs was more expensive than they are.

I think getting rid of certain programs within the Gov't for the GOP has become almost dogmatic and religious in nature, and the tea baggers are the fundamentalists of their religiophilosophy.

Cuts in spending means there is less money in circulation and less jobs for everyone. IT puts people with ten years experience in competition with the unemployed at a time when education funding is also being cut. We are creating a younger class of citizens with no hope of competing.

The short and long term costs of that effect on our economy are incalculable.

Economics is like meteorology. You are dealing with fractal systems so complex , with variables so unpredictable that forecasts become instinctive to the individual.

When ALL of them agree on something? That is generally when you know an economic tsunami is heading your way, because it hardly ever happens.

There are no economists out there that are saying that these spending cuts without revenue increases will work. The GOP ignores that as it ignores global warming. It has a vested interest in playing intelectual possum.

 

[Tengilethos]

It has long been known that giving money to the real poor is one of the most efficient ways to stimulate an economy, because they will spend all of it. I wonder how bad it will be when food stamps get cut. Solving the problem that jobs growth has barely kept up with population growth by letting some unproductive members of society starve to death? Although I don't believe the Republicans are evil and thus won't have this as their goal, it would make sense from a certain far-right standpoint.

This is shocking as well, quoting Matt Yglesias who quotes the Financial Times:

FT piece on America’s infrastructure deficit:

Indeed, the US spends only 2.4 per cent of gross domestic product on infrastructure – less than half the average of 5 per cent that prevails in European countries – and half the level of 1960, according to the Treasury. [...] The number of miles travelled by cars and trucks has doubled in the past 25 years, but highway lane miles have increased by only 4.4 per cent. Demand for electricity has increased by about one-quarter but the construction of new transmission facilities has decreased by 30 per cent. The US now ranks 23rd for overall infrastructure quality, according to a World Economic Forum study.

That is bad policy. Spending on infrastructure would not just be an arbitrary stimulus but would greatly help the US stay competitive at the same time.