[jeffkrol]

That's the whole point--unless you're creating something of value, it's a worthless endeavor:

You can pay half the people in the country to dig ditches and the other half to fill them, creating zero unemployment, but what good comes from it?

You haven't created anything.

Oddly enough it's never quite that simple... it's actually better then not paying anyone.... as you collect taxes and they spend in the economy.. ie food clothing shelter....
In the short term it is beneficial.. to make it MORE beneficial they should do something "worthwhile".....
CCC comes to mind as borderline "worthwhile"...
Civilian Conservation Corps - Wikipedia, the free encyclopedia

. A Gallup poll of 18 April 1936, asked "Are you in favor of the CCC camps?"; 82% of respondents said yes, including 92% of Democrats and 67% of Republicans.[26]

Repeating history.......
http://americanhistory.about.com/od/greatdepression/tp/new_deal_programs.htm
MAY I remind you it did seem to help/work.......
I'm not in favor of going backwards......
Anyways one side note:
http://en.wikipedia.org/wiki/National_Industrial_Recovery_Act

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Last edited by jeffkrol; 09-13-2010 at 05:29 AM.

[GeneV]

... on the other hand, we can't fortell the future. Why detailed centralized planning doesn't work - whether it's the government or it's the home office in a corporation.

So far, it's working out pretty well for the Chinese. They've built transport and communication capacity that is part of what makes their country inviting for manufacturing. It is all a matter of degree and the skill with which it is done.

[Nesster]

So far, it's working out pretty well for the Chinese. They've built transport and communication capacity that is part of what makes their country inviting for manufacturing. It is all a matter of degree and the skill with which it is done.

Yes, the Chinese have hit on the sort of govt/business symbiosis that has worked for the USA in the past as well: government creates common infrastructure and the kinds of conditions where private entrerprise can thrive - i.e. opportunities.

Where it stops working is when govt gets too cozy with big business & starts doing too many favors, and when central planning becomes inflexible & attempts to dictate results.

In the US we have a few structural problems, apart from the overly cozy relationship problem.

Namely, often conservative philosophy won't admit that government creation of infrastructure can be a good thing - the mythology is that corporations do it themselves via market forces. Another problem with many conservatives is the confusion between a true socialist model, and the type of regulatory environment we in fact have.

And often liberal philosophy won't admit that private enterprise benefitting from government infrastructure is a good thing, and there's a lot of confusion about taxation and meddlesome regulation. Regulations and their enforcement is necessary in modern society, it saves us from a lot of damaging practices that business, left to itself, will engage in, in their rush to the bottom.

A good dairy farmer understands the need for a good barn, and the need to feed the cows as well as milk them.

[GeneV]

Good analogy.

I think we are a long way from a point at which roads and other transportation facilities will not be needed. These are pretty safe investments. Picking an energy source is a bit trickier.

[Nesster]

re. picking an energy source - I agree - and this is why it is smart policy to hedge bets and support R&D on several, and let commercial interests and tech breakthroughs take care of finding the best solutions. This has worked for the US government in the past, where it spread research money across potential technologies.

Where it doesn't work is the various "WAR ON" or "OF THE FUTURE" programs, where one technology or goal gets all the money. Gasohol, anyone?

[Ira]

Oddly enough it's never quite that simple... it's actually better then not paying anyone.... as you collect taxes and they spend in the economy.. ie food clothing shelter....
In the short term it is beneficial.. to make it MORE beneficial they should do something "worthwhile".....

But even in the short-term, if the projects don't lead to economic growth in other areas, why not just give people the money without doing anything at all?

I don't think you can underestimate the level of waste in government spending. This is not just a Republican talking point but a reality.

The WPA was a different thing--we not only helped Americans feed their families, but we averted serious psychological damage to millions, and quite literally, preserved our democracy. The U.S.A. was truly a deck of cards ready to fall at any moment.

I just don't think we're anywhere near that low a point now, so comparisons to the WPA and today are only valid on fewer and more shallow levels. On the whole though, I don't believe it's a fair comparison to make.

[Parallax]

Oddly enough it's never quite that simple... it's actually better then not paying anyone.... as you collect taxes and they spend in the economy.. ie food clothing shelter....

Yes, the ditch diggers/fillers spend the money, which means they give it back to the people the government took it from in taxes to pay the ditch diggers/fillers. It is still a zero gain. In fact, it would be a net loss as most of the goods that the diggers/fillers would by were made somewhere else, plus the guy that got it back now has to pay taxes on what had been his money to start with. Taking twenty dollars out of your left pocket and putting in the right doesn't make you twenty dollars richer.

[GeneV]

Yes, the ditch diggers/fillers spend the money, which means they give it back to the people the government took it from in taxes to pay the ditch diggers/fillers. It is still a zero gain. In fact, it would be a net loss as most of the goods that the diggers/fillers would by were made somewhere else, plus the guy that got it back now has to pay taxes on what had been his money to start with. Taking twenty dollars out of your left pocket and putting in the right doesn't make you twenty dollars richer.

Isn't that what all economics is? Someone pays and someone receives and circulates it again. I suppose it is all zero gain under that analysis. I've never quite understood why the government should be any different from any other player in terms of the effect of a dollar spent.

The government provides certain services. It collects taxes to pay for them. It then subcontracts for some of those services (like the ditch digging). It seems like it is pretty close to what many businesses do.

[Parallax]

Isn't that what all economics is? Someone pays and someone receives and circulates it again.

That's true, it is. The difference here is that for my bike shop, I can choose to hire an employee and take money out of the bank for payroll, or not hire anybody and keep my money. With the stimulus, the government is taking my money and hiring people to do jobs, a lot of which don't need doing.

[Nesster]

That's true, it is. The difference here is that for my bike shop, I can choose to hire an employee and take money out of the bank for payroll, or not hire anybody and keep my money. With the stimulus, the government is taking my money and hiring people to do jobs, a lot of which don't need doing.

... or, alternately, with the stimulus the government is giving contracts / sub contracts to businesses such as yours, who then either hire or retain employees who'd otherwise be laid off, and who therefore have money to buy stuff from a company such as yours... etc etc.

Not all the stimulus goes to government payrolls.

[GeneV]

That's true, it is. The difference here is that for my bike shop, I can choose to hire an employee and take money out of the bank for payroll, or not hire anybody and keep my money. With the stimulus, the government is taking my money and hiring people to do jobs, a lot of which don't need doing.

Then those jobs need to be identified and eliminated. But there is a level of service that makes sense for the government to provide. Roads, bridges, airports, air traffic, and ports are just some of the more obvious ones that are in disrepair.

In truth, you have some of the same issues when dealing with any large corporation.

---------- Post added 09-13-10 at 12:20 PM ----------

... or, alternately, with the stimulus the government is giving contracts / sub contracts to businesses such as yours, who then either hire or retain employees who'd otherwise be laid off, and who therefore have money to buy stuff from a company such as yours... etc etc.

Not all the stimulus goes to government payrolls.

Or even most.

[Phil1]

When in debit up to my a$$ and out of work, I always go to a foriegn banker and ask for more money and go buy something really expensive that would be nice to have but really don't need. Anyone smell bacon?

[Nesster]

LOL, there is a history for American companies selling foreigners stuff at the top of a market, and then leaving them with part of the bust. Anyone recall in an earlier era Japanese buying up big office buildings? The Brooklyn Bridge would have been cheaper

[Phil1]

You mean to say the elevator is not at the #8 basement level parking yet?

[seacapt]

But even in the short-term, if the projects don't lead to economic growth in other areas, why not just give people the money without doing anything at all?

I don't think you can underestimate the level of waste in government spending. This is not just a Republican talking point but a reality.

The WPA was a different thing--we not only helped Americans feed their families, but we averted serious psychological damage to millions, and quite literally, preserved our democracy. The U.S.A. was truly a deck of cards ready to fall at any moment.

I just don't think we're anywhere near that low a point now, so comparisons to the WPA and today are only valid on fewer and more shallow levels. On the whole though, I don't believe it's a fair comparison to make.

Ira this doesn't happen often but I totally agree with you