Supply Side Economics Has Been an Epic Failure

[Texas Contrarian]

Originally Posted by Fast Gunn

I always respect your views on financial matters, CM, but I think you are forgetting one very important factor in your analysis.

What you are overlooking is the quality of expenditures made by the government when you look only at dollar numbers.

It was extremely poor judgment by Bush to spend over a trillion dollars of this country's treasure on an elected, unfunded and idiotic war to dig out WMDs that existed only in his misguided head.

That is spending the nation's treasure as foolishly as you possibly can.

On the other hand, when as a result of the mess made by the previous administration you find that the economy is rapidly going to hell in a hand basket, spending money to ramp up the economy is wise.

Now, I will be the first to admit that the stimulus money was not spent as judiciously as it should have, but when you suddenly find yourself with a badly injured patient then you have to administer messy triage right there on the field of battle where you find him before you lose him altogether.

Even as costly and unfortunate as the Iraq War obviously was, it was responsible for a relatively small portion of the debt accumulation between 2001 and 2009.

Look at it like this:

Most analysts assign a cost estimate of roughly $1 trillion to the Iraq War. A few years ago, I recall reading that the run rate of war-related spending was about $150 billion/year. If that was more or less true in 2008, then you can assume that the annual rate of spending (absent the Iraq War) might have "only" been $850 billion higher (than in 2000) instead of $1 trillion higher. Remember, the annual rate of spending increased by about $1 trillion during the Bush years.

The essential point is that even had the Iraq War not occurred, the period would still have been characterized by egregious fiscal irresponsibilty. The war simply made a very bad situation even worse.

And just as is the case today, little of the spending went for what you referred to as "quality expenditures", at least from the standpoint of the nation taken as a whole. Tom DeLay's congress porked up the budget to a then-unprecedented degree, to be exceeded only by Pelosi's a few years later. The capacity for massive pork dispensation and political patronage simply moved across the aisle to the other party, first in 2007 for congress, and then in 2009 for the White House.

As for the idea of spending money in order to "ramp up the economy", that's manifestly not what we've been doing. Starting with the mostly squandered $860 billion "stimulus" package of 2009, it's been all about politics, not economics. Congress paid off favored constituencies without regard for fixing the economic problems we face, or for creating jobs. This involved nothing more in the way of "quality expenditures" than those initiated by DeLay's congresses of the early-to-mid '00s.

That's why I've said that we're just kicking the can down the road and digging a deeper hole. I'm afraid we are building a bridge to the next crisis, not one to a more prosperous future.

One of the key points I continue to try to make is that we're doing nothing to address serious structural problems our economy faces. I discussed a couple of these issues in this thread, particularly in post nos. 13 and 21:

http://www.eccie.net/showthread.php?t=315363

[CuteOldGuy]

The problem is, Cap'n, that the deficit spending has bought a tremendous amount of votes and control. In order for the structural changes we need to be enacted, Congress and the President have to give up a lot of control, and alienate a number of voters. Ain't gonna happen. They will choose the wrong course, which is, of course, more control. We are plunging rapidly into a socialist wasteland, where freedom will simply be a quaint memory.

[Fast Gunn]

I am talking in very broad and general terms.

Bailing out the auto makers for example, was a tough but necessary measure even though it was bitter medicine to swallow by the taxpayer.

By comparison, during the Great Depression, the government made the fateful mistake of withholding credit instead of helping out businesses who were in desperate need of funds to remain operational.

That monumental error in judgment by the US government made the Great Depression longer and deeper than it could have been.

Originally Posted by CuteOldGuy

Fast Gunn, what stimulus projects were "Quality expenditures"?

[CuteOldGuy]

You said they were quality expenditures? What were the projects? You must have examples if you think they were quality expenditures.

[CuteOldGuy]

Here, let me help you. According to this official US government website, if you do the math, stimulus funds have created 408,000 jobs. Admirable! Good work! Uh, wait a second. The cost per job works out to be $669,048.00.

Must have been extraordinarily high quality expenditures.

The stimulus package was simply a device to reward Obama supporters, and buy a few more votes and campaign contributions.

[CuteOldGuy]

Here's the link for you.

http://www.recovery.gov/pages/textvi...cipientHomeMap

[CuteOldGuy]

Here's another. How does this stimulate the economy?

http://thehill.com/blogs/floor-actio...ng-for-diapers

[CuteOldGuy]

I'm not even looking for these.

http://www.politico.com/news/stories/1111/67444.html

Now, where are the quality expenditures?

[Texas Contrarian]

This short series of video clips is pretty telling:

http://www.youtube.com/watch?v=mJrdoGxCTzM

Toward the end, Immelt can be seen laughing. But many others, who have lost patience with government ineptness and irresponsibility, aren't quite so amused.

[Fast Gunn]

You gentlemen are free to disagree with me, but I have said all I need to say on this subject.

. . . Let's move on.

[Texas Contrarian]

Unlike some of his better-known brethren, this economics professor gets it:

http://online.wsj.com/article/SB1000...=ITP_opinion_1

Blind faith in doctrine that should have been considered thoroughly discredited long ago continues to do great damage to our prospects for economic recovery.

[BigLouie]

[CuteOldGuy]

Fast, so you were just making it up when you said that stimulus spending was worthwhile, eh?

Louie, you left out Obama. He is running a trillion dollar deficit. Is he a fiscal conservative now?

[Marshall]

BigLougie:

Originally Posted by ;1808048

Hey dumbass, I'll bet you can't tell me who was in charge of Congress during the Reagan and Clinton presidencies!....HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA! HA!

You don't even know what Supply-Side Economics is or when it was implemented and to what degree!!!!!

[Texas Contrarian]

Originally Posted by CuteOldGuy

Louie, you left out Obama. He is running a trillion dollar deficit. Is he a fiscal conservative now?

Some people are simply blind partisans. They think everything is always the opposing party's fault, while their beloved party cannot possibly do anything wrong.

To such folks, it's all about party identity -- whether you have a "D" or an "R" beside your name. But bad policy is bad policy, and fiscal recklessness is what it is no matter which party is responsible.

And it's very amusing to see a graphic labeling George W. Bush a "fiscal conservative!"