United States First Quarter Contraction.

It's an earned income credit. If your talking about the 1200. There was a 2.2 trillion dollar stimulus passed. Is there any other money going anywhere that could be considered a handout? Also the extra 600 a week people are making off unemployment is ridiculous. I have friends maki g more sitting at home than being at work.

 

I think the virus, which is no one's fault which has displaced millions of people, the bail out is warranted. I assume you will be returning your check, if you receive one? Moreover, $1200 is not a 'bail out, as it will last not more than two weeks for many people, one week for others. It's a one off shot in the arm, nothing more. Corporations get a lion's share of the goodies from the federal trough. I hope the banks do the right thing and help the honest, hard working mom and pop shops who really need help.

 

It is not ridiculous. It is well deserved and paid into. I'm glad they are making more. I'm still working but good for them.

 

Interesting

 

After the disease we need to slash federal spending.. simple.. in half ought to be a good start.

Hell no to any new or increased taxes..

If the government cannot afford it's operational expense then those expenses need to be reduced.

 

We claim to be capitalist and yet we bail out our corporations once a decade now. I mainly have a problem with the 600 dollars of extra money on unemployment. 1200 is a non issue to me. When billion dollar companies are getting my money I have a problem. They should be able to plan ahead like we have to.

 

Agreed. I believe we should be forced to run no deficit unless it is a state of emergency. Like now.

Except I would be for removing some taxes in exchange for others.

 

Your glad they are making more? Why please explain why someone deserves more to sit on there ass all day.

 

Flat national sales tax. And completely axe the IRS.. no more paperwork. And congressional super majority needed in both houses to increase it with the president's signature and no ability to override. And any bill to increase it cannot be an add on to other legislation.

 

They were being underpaid to begin with. They need the extra money during this pandemic; besides, it's temporary.

 

Deficits are necessary.

 

I like your plan. I really do.

 

They dont need the extra money during the pandemic. Everything's closed. If they were being underpaid before that's their issues and not the government's. The government doesnt need to provide more for people than what they provide for themselves. If they would have giving 100% unemployment for people during this up to their 75000 that would of been fine but not extra. You should get paid extra to sit on the couch.

 

No, everything is not closed. Libertarians are bizarre.

 

Goldwater did not hold the positions you are attributing to him. Goldwater despised modern conservatism - rather prophetically at that.

 

Barry Goldwater supported property rights and privacy to an extreme and that was what I was referencing...

 

Good that he supported property and privacy rights to the extreme - that is the point of both Republicanism and Classical Liberalism.

Do not however make the mistake of attributing the extremities of modern conservatism to him - not that you did directly - but were kind of leaning that way... especially given beliefs of the poster you were responding to. Few similarities between the two.

 

Good argument. Yes everything not closed but extra activities are. Cant vacation and some places you literally cant go out.

 

I am surprised the number wasn't worse. Probably because lock downs really didn't truly start until well into March. I also wonder what will be more devastating to people, the virus or the lock downs. Guess only time will tell.

Why are deficits necessary?

 

primer: http://neweconomicperspectives.org/2016/02/explaining-federal-deficits-needed.html

 

Apologies if I gave that impression; I did not mean to imply Goldwater translates to modern conservativetism in total, but one area.

 

Yes, but the extra money assists not only with immediate bills and perhaps fighting boredom but necessary medical attention and emergencies during the pandemic.

 

I dont care about fighting boredom. That's a person to person problem the government doesnt need to fix. Immediate Bill's should be able to be paid on their normal paychecks. If only those that recieved the 600 were in medical emergencies it would make more sense

 

I admit I am not a genius in economic and monetary policy, but I am definitely above the average person. I don't think this article helped my thoughts or understanding at all and I'll explain my thoughts on them so you can understand where I am coming from.

From your article:
"Federal deficits are necessary and the government normally runs them. It ran them during 129 of the past 200 years or nearly two thirds of the time. During the other third, it ran surpluses to reduce its debt during five periods of six or more years. Each period led to a major depression.

1823-1836: Federal debt reduced 99% – depression began 1837.
1852-1857: ” ” ” 59% – ” ” 1857.
1867-1873: ” ” ” 27% – ” ” 1873.
1880-1893: ” ” ” 57% – ” ” 1893.
1920-1930: ” ” ” 36% – ” ” 1929.

The government had to run deficits to recover from each depression."

First this article acts as if the reason for depressions were reduction in debt, if one takes a few minutes to read about each of these depressions they will find lots of reasons, from over speculation, mal-investment, break down of trade, natural disasters causing shortages, etc and so on. It seems these things caused the depressions not a simple reduction in federal deficit spending.

A chart of Total federal spending as a percentage of GDP shows during years of these depressions the US federal spending as a percentage of GDP was rather level, accept of course for during the Civil war, WWI and up until the start of the great depression around 1930. It stands to reason if the government is spending at a static percentage of GDP, when depressions happen GDP declines, with it tax revenues and thus deficits. Then when depressions end, not because of deficit spending as the article implies but the underlying issues were resolved, tax revenues increase again and deficit spending disappears. If it really was true that the reason we came out of depressions was from the deficit spending, it would seem to me one could make the argument that if we continue to deficit spend it will allow us to avoid economic downturn, I think we would both agree that thought is preposterous. But like our current situation the examples of economic downturn in this article didn't come from the federal government running a surplus thus its premise doesn't seem likely to me.

Second thing from your article: "The economy needs a continuing influx of new dollars to grow. The government creates new dollars when it runs deficits by spending more than it receives from taxes."
This 2nd part of the article acts as if deficit spending by government is how money is created, it implies if the government was running a surpluses the money supply would shrink. I don't believe this to be true. The federal reserve manipulates the supply of money and can increase it without government running a deficit.
Quite from the St. Louis Fed: https://www.stlouisfed.org/~/media/.../pub_assets/pdf/re/2013/b/reader_exchange.pdf
"The Fed controls the supply of money by increasing or decreasing the monetary base. The monetary base is related to the size of the Fed’s balance sheet; specifically, it is currency in circulation plus the deposit balances that depository institutions hold with the Federal Reserve. The Fed has essentially complete control over the size of the monetary base."

On a side note I would agree with the articles premise a little in that the economy grows (with GDP being used as the measure) when the government continues to run such a large deficit as its spending is counted into measures of GDP. Though I think most people would agree that if private sector economic growth remains stagnant or shrinks and government spending is the only thing being used to grow said economy that as more time passes it is in more trouble.

The article says it has five nuggets to quickly explain why deficit spending is needed and the last one is to reverse the discussion. This says if someone doesn't think federal deficits is necessary ask them these two questions and states there are no good answers. This doesn't teach someone trying to learn anything about why deficits are necessary and honestly just seem like such BS gotcha questions, total strawmen, and really turned me off to the article.
"1. Why should the government avoid spending to meet the country’s critical needs in order to save dollars which it can create?"
"2. How could the government ever run out of dollars since it can create them by running deficits?"

The issues with question one in my mind is that it assumes the position of those being asked it. Since as the article states its being used against someone who disagrees with the premise of deficit spending being needed, it better be correct about their position it is assuming. By that I mean people who don't want deficit spending may not be saying stop critical spending, they may say raise taxes; cut waste, fraud and abuse; cut things not deemed critical; etc and so on. Also it uses the nebulous term critical needs, people can argue about what constitutes critical needs forever. I simply hate this question.

Issue with question two is also assuming that people who disagree with deficits are saying so because they believe the government will run out of money. I don't think many people at all would make that argument running out of money. I think more instead would likely gravitate toward the arguement that the government would devalue its money and hurting its people more.

... heck I know of Zimbabwe



I think the article is wrong, and think they really should remove those questions at the end, it would make it a bit better; but honestly didn't really teach me why deficits are needed.

 

Of course - just a slight correction to the direction of the arrow.