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| 09-19-2010, 05:58 PM | #1 |
| Cause of the recession
I need to look into this:  Quote: Economist James D. Hamilton has argued that the increase in oil prices in the period of 2007 to 2008 was a significant cause of the recession. He evaluated several different approaches to estimating the impact of oil price shocks on the economy, including some methods that had previously shown a decline in the relationship between oil price shocks and the overall economy. All of these methods "support a common conclusion; had there been no increase in oil prices between 2007:Q3 and 2008:Q2, the US economy would not have been in a recession over the period 2007:Q4 through 2008:Q3."[126] Hamilton's own model, a time-series econometric forecast based on data up to 2003, showed that the decline in GDP could have been successfully predicted to almost its full extent given knowledge of the price of oil. The results imply that oil prices were entirely responsible for the recession; however, Hamilton himself acknowledged that this was probably not the case but maintained that it showed that oil price increases made a significant contribution to the downturn in economic growth.[127] | |
| 09-20-2010, 05:22 AM | #4 |
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Thus the "look into it" statement....... From his blog........ regarding "small business" Quote: And why no more than that? Paul's answer is based on Catherine Rampell's observation that there has been a significant increase since 2007 in the fraction of small businesses reporting poor sales as their biggest single problem.  The chart is quite interesting....... check ins. costs in 2000's I did like this quote from the blog (not the author) Quote: Small businesses' perceived problems shift with both political and economic winds. Three recent features in the graph make this evident. 1) After the election of 2006, taxation as the perceived primary problem increased quite dramatically, then fell off once fright over the democratic electoral victories had receded. 2) After January 2009, though Obama had not conspicuously increased taxes, fulmination over the as yet imperceptible waves of his invisible hand certainly drove concern over taxes upwards. It might be useful to subject these perceptions to a reality check against tax incidence for small business, before asserting that demand is not the end of the story. 3) It must also be pointed out that primary concern over "government regulation" increased stunningly as the 2009 stimulus bill went into effect. Most likely, businesses were "primarily concerned" over filling in the paperwork for contracts they wished to compete for! So, "taxes," as a problem, out of the mouths of businesspeople: a joke, unless you care to demonstrate otherwise. "Regulations," in the current context: a proxy for effective demand, the same problem indicated by "poor sales." Lack of effective demand is not the entire problem. We must add the refusal by businesses to invest, a behavior quite unlikely to change until after the election. Until then, businesses will simply keep hands in pockets, not the first time palpable threats of deadly inaction have been deployed to move electorates. Quote: If (1) one is a concerned about budget deficits over the longer term, but (2) is concerned that a reversion to pre-2001 tax rates would hurt short term growth, then one should favor the partial extension of EGTTRA/JGTRRA for only those earning less the $250K ($200K for singles).............. Full extension has only minimal additional impact on GDP relative to partial extension. And.......... the stimulus helped.. regardless of nay sayers...... http://www.econbrowser.com/archives/2010/08/kevin_dow_36000.html Quote: I believe that think tank economists provide a useful purpose in providing diverse views in ongoing policy debates. However, in this case, I think I will forego Dr. Hassett's assessment, and put my faith in the assessments from private sector economists who do not have an ideological axe to grind. Below is Deutsche Bank's recent assessment of the impact of various fiscal stimulus measures on the level of GDP.  and a Bush bash................ no thread is complete without it........ Quote: In any case, this seems to me to be a case where the data speak pretty clearly without the need for much reinterpretation. The graph at the right displays federal government receipts and expenditures, each as a percentage of GDP, for the last 35 years. Tax revenues fell from 20.9% of GDP in 2000 to what is now projected to be 17.4% of GDP for 2005. Federal expenditures rose from 18.4% to 20.1% over the same period. With tax revenues way down and expenditures way up, voila, a big surplus turned into a much bigger deficit. In terms of this simple arithmetic, 2/3 of the swing from surplus to deficit would be attributed to lower tax revenues and 1/3 to higher spending. It's hard to see how one can argue that the tax cuts set in motion some economic changes that would be starting to show up only now or even later. The logical mechanism for such a delay would presumably come through investment spending. But as Angry Bear again noted, national saving and investment as fractions of GDP are both down since 2000, so the data so far would seem to work against such an effect. Rather than the first fruits of an incipient big return on the tax cuts, it seems much more natural to me to attribute the recent upswing in tax receipts to the natural consequence of a cyclical recovery and some revenue mechanisms that could prove to be temporary. Nonetheless, the above graph also suggests that using 2000 as the base year for fiscal comparisons may be a bit misleading, since tax revenues for that year were at their highest level and expenditures were at their lowest level, as percentages of GDP, of the previous quarter century............It seems to me that any way you want to slice these numbers, unusually low tax revenues have to be the biggest part of any account of where these unusually large budget deficits came from. There may be good reasons for wanting high government spending, and there may be good reasons for wanting low taxes, but the reality is that we have to choose between the two. It would certainly be nice if cutting tax rates caused tax revenues to go up. But wishing doesn't make it so.  And to kick the current GOP........ http://www.buffalonews.com/incoming/article195549.ece Quote: You will have to forgive John Boehner. For a moment there, he thought he was a statesman, a member of Congress, a leader of his party, who had the responsibility to contribute to the wise governance of a nation that is facing difficult economic choices. Then Boehner remembered that his job as House Republican leader is to oppose absolutely anything President Obama favors, no matter what sour consequences might result for the nation and most of its people. ....................That’s the pleasure of being out of power. You get to act in a totally irresponsible manner, and watch the other guy suffer for it. Quote: Would-be Speaker John A. Boehner asserted last week that he can manage a strongly conservative, tea-party-inspired majority next year, but potential government shutdowns and efforts to terminate earmarks are already emerging as issues that could divide his party. Rep. Steve King (R-Iowa), one of the most outspoken conservatives in the House, said last week that he wants Boehner and other House leaders to sign a “blood oath” that they will include a repeal of health care reform in every appropriations bill next year, even if President Barack Obama vetoes the bills and a government shutdown occurs............................“I am committed to doing everything I can do, and our team can do, to prevent Obamacare from being implemented,” Boehner said. “And when I say everything, I mean, everything.” Quote: Donny Shaw, writing in OpenCongress, sums it up beautifully, A Republican-led Congress would send Obama an appropriations bill minus the money for enacting the health care law and dare him to veto it. If he vetoes it, no funds are appropriated and unless Congress folds and sends it back with the health care money included, funding for the government would start to run out. Most of the health care funding would be contained in the Labor-HHS-Education appropriations bill, which funds a lot of the programs that get the most use, like public schools, low-income heating assistance, unemployment insurance, job training, and public broadcasting, so it would be a very high-stakes game. Quote: A high stakes game to be sure – and one more likely than not to leave the Republicans looking like the villains. Nobody expects the president to go along with the destruction of the health care reform legislation that cost him every bit of his political capital just because the Republicans promise to hold their collective breath until the president cries “uncle”. Accordingly, it is far more likely that the nation will see a pigheaded GOP as being responsible for denying them much of the benefits they count upon. And should the Republicans lose this game, they will forfeit much more than their aspirations regarding the death of Obamacare. Losing a show-down that shuts down government means saying goodbye to dreams of regaining control of the White House in 2012. Of course, there is always the possibility that the White House will continue to fail miserably in their ability to capitalize on even the most obvious of GOP missteps and hand a Republican Congress – and a Republican candidate for president – the victory they desire. For those of you who suspect that there may be more ‘meat’ on the bones of the GOP promise to blow away Obamacare than what I am suggesting, you might wish to drop by defundit.org, the website the Republicans have put up to gain support for their plans. You may be as surprised as I was to find that they have not posted one word on how this program would actually work. Last edited by jeffkrol; 09-20-2010 at 06:26 AM. | |
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