Obama Jobs Plan

[The Minsky Moment]

Yes, obviously. But it's not magic. The money the government spends has to first come out of the economy before it can go back in. That money was already out there in the households and businesses before the government took it to spend back to them.

Money may be "out there" but under conditions of flight to liquidity, as after an asset crash, it is effectively inert and undeployed.   Again - that is the condition we are in now, as banks hold abut $1 trillion in Fed reserves and households pour savings into no yield savings accounts and inert security assets like gold.  Ideally, as good capitalists we would like to see this money invested in private enterprises who would in turn use the finance to expand operations.  That is not happening, both because investors seeking safety and liquidity have no appetite for private risk assets and because business are not sufficiently optimistic about future prospects to expand capacity.  But if investors have a strong appetite for government debt assets - and they do - that opens the possibility of a second best solution of having the government temporarily fill in the investment gap.  The alternative is to let existing stocks of savings sit undeployed and then watch them shrink in a debt deflationary spiral.

If it's borrowed, it's just future taxes.

Only if you accept strict Ricardian Equivalence, which I don't for many reasons.

[The Minsky Moment]

Yes. Which is why stimulus should be spent on those types of things that produce growth like infrastructure.

One of the things I found curious about the last stimulus debate was how the left side of the debate wanted to emphasize immediate shovel-ready projects.  I thought that short-sighted and based on fundamental error.  Once the government commits in a credible way to significant infrastucture investment, there can be a very quick stimulative effect even if the first shovel doesn't go into the ground for a while, because businesses that want to bid for construction work have to start to ramp up in advance of actually doing the work, engineering firms have to start preparation on drawings, concrete and steel producers have to get capacity on line to supply future expected needs, etc.  Investment decisions in the present can be driven by expectations of future business, so long as those business prospects are not unduly remote or uncertain.

[derspiess]

Watched the speech tonight.  Reassuring to see that certain House members continue to eschew decorum when a nigger's at the podium.  Why break a streak.

You're keeping up your own streak, I see.

[MadImmortalMan]

The opportunity cost of taxation changes so dramatically in a liquidity trap situation I wonder if the best thing to do then is just to jack tax rates to the moon.  :p


I mean, Japan's working on their third lost decade and all the deficit spending isn't doing anything..

[Razgovory]

Didn't even bother to watch it.  Ide and CdM proposing a nuclear first strike on China is more entertaining and has about the same effect on US policy.

[CountDeMoney]

Watched the speech tonight.  Reassuring to see that certain House members continue to eschew decorum when a nigger's at the podium.  Why break a streak.

You're keeping up your own streak, I see.

I'm not the racist GOPtard here, derfuhrer.

[derspiess]

I'm not the racist GOPtard here, derfuhrer.

No, you're the racist "Independent".

Love your sig, btw.  Bonus points for leaving "son of a bitches" uncorrected

[MadImmortalMan]

Dear Mr. President:

Thank you for your address to a Joint Session of the Congress last night, and for presenting your ideas.  We believe creating long-term, sustainable jobs must be the top priority for elected leaders of both parties, and it is our desire to work with you to find common ground on steps that can be taken to allow our economy to grow and to create those jobs.  While we have a different vision in terms of what is needed to boost private-sector job creation in our country, we believe your ideas merit consideration by the Congress, and believe the American people expect them to be given such consideration.

We look forward to receiving legislative text for any of your ideas in a manner that can be scored by the nonpartisan Congressional Budget Office, and to the upcoming speech you described last night in which you will detail the offsets that will be needed to ensure your proposals are paid for.

The House and our committees will immediately begin the process of reviewing and considering your proposals.  We will examine the impact of your proposals on both short and long term economic growth and we will identify modifications and additional ideas that could achieve economic and job growth in a manner that may be more impactful or effective.  For instance, these ideas could include elements of the multiple bills passed by the House earlier this year to remove government barriers to private-sector job creation that are currently awaiting action in the Senate.  In addition, the House will continue with the jobs agenda outlined last month which among other things would provide relief to our nation's job creators – especially small businesses – from the high costs of some of your Administration's pending regulatory actions

As we are certain your advisors have told you, not all your ideas should be packaged in a single legislative vehicle.  For instance, due to the structure of Trade Promotion Authority procedures, passage of the free trade agreements with our allies – Colombia, Panama and South Korea – is better achieved moving as stand-alone legislation.  We again ask that you send those agreements immediately to the Congress for our consideration and approval.

We share your desire for bipartisan cooperation, and assume that your ideas were not presented as an all-or-nothing proposition, but rather in anticipation that the Congress may also have equally as effective proposals to offer for consideration.  The American people expect us to bring together the best of both parties' ideas, and it is our desire to work together to find common ground between your ideas and ours.  The House is committed to working with our Senate colleagues and your administration to confront our nation's economic and employment challenges.

Sincerely,

John Boehner                                                              Eric Cantor
Speaker 

[Sheilbh]

Love Boehner, hate Cantor.

Also on those free trade deals I thought the South Koreans were dead against it (and angry) over something to do with American beef?

[Admiral Yi]

Love Boehner, hate Cantor.

Also on those free trade deals I thought the South Koreans were dead against it (and angry) over something to do with American beef?

Korean farmers tend to congregate in front of cameras and howl and cut off fingers but that doesn't equate to the entire country being against it.

[Sheilbh]

Korean farmers tend to congregate in front of cameras and howl and cut off fingers but that doesn't equate to the entire country being against it.

Enough to effect the legislature though?

[Admiral Yi]

Enough to effect the legislature though?

I thought it had already passed.  Could be wrong.

[HisMajestyBOB]

Enough to effect the legislature though?

I thought it had already passed.  Could be wrong.

They delayed it until the US ratifies it. If it happens before 2012 then I expect Lee Myung Bak will get it through. We can expect at least one good fistfight however.

[11B4V]

http://money.cnn.com/2011/09/09/technology/solyndra_fbi/index.htm?section=money_mostpopular&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_mostpopular+%28Most+Popular%29

Tax payer money well invested.

[Neil]

I wonder why a low-silicon solar panel would be attractive?  15% of the Earth's mass consists of silicon.  It's not exactly a rare earth.