Stimulus growth vs demand based growth.

[The Buddha]

OK I am going to post what I think, and y'all go on your tangents.
Growth is like a regular duck. Its not that big, but its strong and it gets hard and it can get into tight holes and well, it can make babies. Its well the reason there is actually demand, like when the babies grow up and become little pricks of their own etc etc.
Stimulus is like the 13 inch duck that wont get hard. To quote president Obama its big and bold and aggressive ... but it cannot enter nothing especially anything tight and definetly wont make babies, it in fact will get in the way of the real duck that will have to work the holes to make babies. Here is what it will turn into in a few years.
Real growth is the 89 gs 500 that cost 1000 bucks and is still in use and gets flogged everyday and has 50K miles on it and still gets up and runs everyday. Sorta like that duck. The stimulus is the spanking (no pun intended) brand new HD clone that cost 55K that sits in a garage and wont start on the 1 warm weekend in the middle of winter cos its sat for months.
Real growth is the narrow 2 lane highway that has so much use that its got a wear in the road that threatens to high center lowered cars, stimulus growth is the 16 lane super highway that sees 100 cars an hour in rush hour. I hear there is one through huntsville Alabama. In 93 I saw it, maybe they ahve made it much much bigger now.
Real growth is the 50 year old brownstone that houses a family of 5 where every inch of the house is used and they all love it and its perfect for them. Stimulus is growth is the McMansion that is vacant and rotting with no one having ever bought it in a far flung exurb.
The list is endless. The distinction is this.
In the wild the animals that get hinted are the weak, the sick and the aging. That is real. In the world of the hunter the healthy males with the big rack get killed for trophy value. Huge difference.
We'll dig the Iron ore out of the ground, we'll spend millions smelting and purifying it, we'll make a GS that will get used 1000 times over, or we'll make a ornament that sits and rots. We have done the latter in large numbers and gotten into the mess we are in. Now we will do the latter and get out of this mess. Really ? really ?
When you find yourself in a hole ... guess what - stop digging.
Cool.
Buddha.

[yamahonkawazuki]

Have this fasscination wiht "ducks" Eh?

[Jughead]

Have this fasscination wiht "ducks" Eh?

13" Ducks? 

[lawman]

OK I am going to post what I think, and y'all go on your tangents.
Growth is like a regular duck. Its not that big, but its strong and it gets hard and it can get into tight holes and well, it can make babies. Its well the reason there is actually demand, like when the babies grow up and become little pricks of their own etc etc.
Stimulus is like the 13 inch duck that wont get hard. To quote president Obama its big and bold and aggressive ... but it cannot enter nothing especially anything tight and definetly wont make babies, it in fact will get in the way of the real duck that will have to work the holes to make babies. Here is what it will turn into in a few years.
Real growth is the 89 gs 500 that cost 1000 bucks and is still in use and gets flogged everyday and has 50K miles on it and still gets up and runs everyday. Sorta like that duck. The stimulus is the spanking (no pun intended) brand new HD clone that cost 55K that sits in a garage and wont start on the 1 warm weekend in the middle of winter cos its sat for months.
Real growth is the narrow 2 lane highway that has so much use that its got a wear in the road that threatens to high center lowered cars, stimulus growth is the 16 lane super highway that sees 100 cars an hour in rush hour. I hear there is one through huntsville Alabama. In 93 I saw it, maybe they ahve made it much much bigger now.
Real growth is the 50 year old brownstone that houses a family of 5 where every inch of the house is used and they all love it and its perfect for them. Stimulus is growth is the McMansion that is vacant and rotting with no one having ever bought it in a far flung exurb.
The list is endless. The distinction is this.
In the wild the animals that get hinted are the weak, the sick and the aging. That is real. In the world of the hunter the healthy males with the big rack get killed for trophy value. Huge difference.
We'll dig the Iron ore out of the ground, we'll spend millions smelting and purifying it, we'll make a GS that will get used 1000 times over, or we'll make a ornament that sits and rots. We have done the latter in large numbers and gotten into the mess we are in. Now we will do the latter and get out of this mess. Really ? really ?
When you find yourself in a hole ... guess what - stop digging.
Cool.
Buddha.

Thomas Malthus tried to point out that growth, almost by definition, is not always a good thing.  Even then, growth doesn't always come purely from industry.  We just saw growth fueled by artificial demand - debt, and it looks like the world is addicted to that sort of growth.  But we used to see growth from technological innovation, which can improve both the economy as a whole and standards of living.  That's the sort of growth we need to foster, and it comes from supporting technology, improving schools and opportunity, and, in my opinion, eliminating a class of fat cats who do very little if anything.  My favorite example is paris hilton - she'll be grossly wealthy forever.  Her kids will be grossly wealthy.  What has she done?  I think that this country, and in fact the world, faces a class war.  The people at the bottom can't accept that the improvements in their lives will come from the increasing sizes of the crumbs left over as the entire pie gets bigger.  We need to commit to economic equality before wealth consolidates and the US is exactly the sort of oligarchic monarchy we seceded from.  Two clintons ran for president within 8 years of each other.  Two Bushes served as president within 8 years of each other, while another sat as a governor.  A kennedy nearly became a senator on no experience other than being born of her father.  Sound like dynastic perpetuation to you?

I hear people debating taxes.  They're all pussies.  We need an 85% inheritance tax and a progressive graduated income tax with a top income bracket around 85%.  If you want to leave money for your kids, do it while you're alive at the gift tax of 35%.  Don't make them tear it from your cold dead hands.  Exempt family farms if you have to, exempt educational savings accounts for existing individuals if you have to, but crush out the ruling class.

I also hear people debating regulation.  Morons.  The problem in this country is that money talks, and more money talks louder.  If the government doesn't regulate, with some honesty as well, companies can do what they want.  We had huge antitrust problems in the early 20th century. Now again we have massive comglomerates - banks, media outlets - wal-mart can, and has threatened to, cause a recession by simply laying people off.  How can that happen in this country?

Finally, how can someone who makes $40k a year ever be concerned that taxes in the top brackets are too high?  That person's kids go to state-supported schools, he drives on state supported roads, probably gets a tax break for observing the religious institution of marriage...  Why is it a bad idea to him that someone making a milliion dollars pays 85 cents of each of the last 200k in taxes?  That millionaire is paying LESS in taxes on the first $40k HE makes, because he's putting the max in his 401k, and deducting his mortgage interest, and mileage, and the home office he uses, and that sort of crap.  Bet the guy making 40k is having a hard time paying for healthcare.  Bet the guy making a milliion isn't.

Sorry... There's your predicted rant.  I actually truncated myself to some extent... believe it or not.

[The Buddha]

Yes growth is not always good and stimulus driven growth would more than likely be much much more bad than good.
We'll make and very soon junk a lot of things consume a lot of energy and really pollute the earth in the process.
The whole "build it and they will come" philosophy is flawed. It creates worthless Mcmansions in far flung exurbs. The right philosophy is "if they need it they will build it".
Cool.
Buddha.

[lawman]

Markets are based upon certain presuppositions - limited barriers to entry, free movement of capital and investment, competition in the form of many suppliers.  I agree to an extent, but you're sort of overlooking the market distortions that have popped up here.  It's not just credit causing people to spend more than they should, it's circumstances inflating prices as well.  Food got expensive because energy got expensive, and food has to be moved because of consolidation of farms into mega conglomerates.  Fuel is expensive in part because of demand - people demand too much because governments and insurers subsidized the SUV in order to inflate tax revenues and the profits of american automakers who specialized in them.  Stimulus based growth in targeted industries that creates jobs immediately will create real actual demand, while correcting some of these imbalances.  It means jack and sh*t if we don't fix the market distortions at the same time too - which means regulation and the elimination of some pricey, stupid tax cuts, breaks, and incentives.

I actually wouldn't mind if the federal government took over Bank of America and Chrysler, and used BOA as an arm of the fed and chrysler to build a 100 mpg car that costs less than 10 grand.  That would create a lot of jobs and force some market innovations.  This country really does need new infrastructure - roads, bridges, schools, power grid.  Doing that right now creates jobs  right now, which creates jobs right now.  Doing it right improves conditions to help growth once the economy stabilizes.

In the long run, people need to realize that nothing can grow forever.  What goes up MUST come down, unless propped up.  the 2.5 kid, 2 car, picket fence, retirement american dream is over.

[bill14224]

Hi Budda.  You haven't been to the carburetor thread in awhile.  I asked you a question there.

As for this recession we're in, I disagree as to why, but I don't disagree with your philosophy that boils-down to the fact many Americans are just downright wasteful by overproducing and throwing out perfectly good shaZam!.  That is very true.

We're not in a recession with a collapsed stock market and crappy housing market because we over produced.  The main reason is congress back in the mid 1990's coerced private banks as well as Fannie Mae and Freddie Mac (government formed banks) to extend mortgage loans to people who had no business getting loans.  Private banks were threatened with discrimination suits if they didn't comply.  Fannie Mae bought those loans the banks made, re-packaged them, and re-sold them to the unsuspecting public as "mortgage backed securities".  When rates rose, which is inevitable, millions stopped paying their mortgages at the same time, flooding the market with bad debt, which took the market into the tank along with many banks and also insurance companies who wrote policies on those loans. (derivatives)  The problem was caused by arrogant, crooked, power-hungry politicians forcing banks to go against centuries-old loan practices.  Banks and insurance companies were also culpable for going along with it, knowing what would eventually happen.  That's why they got their bailout money so quickly.  We do know what hush money is, don't we?

[yamahonkawazuki]

Have this fasscination wiht "ducks" Eh?

13" Ducks? 

Remember its nto teh size of your duck its how you use it 

[The Buddha]

Hi Budda.  You haven't been to the carburetor thread in awhile.  I asked you a question there.

As for this recession we're in, I disagree as to why, but I don't disagree with your philosophy that boils-down to the fact many Americans are just downright wasteful by overproducing and throwing out perfectly good oh my goodness.  That is very true.

We're not in a recession with a collapsed stock market and crappy housing market because we over produced.  The main reason is congress back in the mid 1990's coerced private banks as well as Fannie Mae and Freddie Mac (government formed banks) to extend mortgage loans to people who had no business getting loans.  Private banks were threatened with discrimination suits if they didn't comply.  Fannie Mae bought those loans the banks made, re-packaged them, and re-sold them to the unsuspecting public as "mortgage backed securities".  When rates rose, which is inevitable, millions stopped paying their mortgages at the same time, flooding the market with bad debt, which took the market into the tank along with many banks and also insurance companies who wrote policies on those loans. (derivatives)  The problem was caused by arrogant, crooked, power-hungry politicians forcing banks to go against centuries-old loan practices.  Banks and insurance companies were also culpable for going along with it, knowing what would eventually happen.  That's why they got their bailout money so quickly.  We do know what hush money is, don't we?

Oh yes, I dont dis agree with this. I however would not go as far back as the 90's, it really cranked up in 01-02. Possibly the laws were put in place and started in motion in 90's.
Cool.
Buddha.