Posted by bad_luck on 3/4/2013 7:23:00 PM (view original):
Posted by examinerebb on 3/4/2013 7:04:00 PM (view original):The point isn't that the government fixes the economy by itself. It's that the government spends enough to fill the hole while demand is low, propping up the economy until it's rational for individuals to fill it themselves, and then scales back and addresses the deficit.
Your assumption is predicated on either:
a) the government spending enough to create enough jobs to get us to 5% unemployment
b) there being some other plan in existence, that none of us are privy to, to create those jobs
c) we do it indefinitely in the hopes that, someday, a plan exists to create those jobs
I can't see how Option A happens. It would require either a back-breaking amount of revenue from the current wage earners or an increase in the national debt so steep that the interest payments become overly cumbersome as rates rise with an improving economy. So I would assume it's Option B or C, in which case we're (among other things) back to fixing the housing market.
If Apple decided, **** it, we want to spend a billion dollars hiring more employees, you'd agree that that would have a positive effect on the economy, correct? Those new employees now have paychecks that they spend etc., etc. etc..
Is it somehow less positive for the economy if the government decides to spend a billion dollars hiring companies to repave highways? Those construction workers now have paychecks that they spend etc., etc., etc..
I understand what you're saying - what I don't understand is why you can't see that there is no endgame to that course of action. You're advocating that the government prop up the economy until we have another bubble. At that point the government will use the increased revenues to feverishly pay down the debt we've incurred waiting for said bubble, while making common sense cuts to social programs that aren't as needed, thereby simultaneously reducing the deficit. Setting aside the fact that expecting the government to exercise common sense is a fool's errand, the bubble that allows all this to happen will inevitably burst, and we'll be right back here again. And the debt isn't getting any smaller over the years. We cut the deficit from time to time, but the debt continues to grow. We will eventually reach the point of critical mass, where even a booming economy doesn't allow the government to make interest-only payments on the debt we've accrued. There are obviously people who are content to kick that can down the road to another generation. There are also those of us who are not.
And, yes, it's less positive for the economy for the government to create the jobs. Every penny the government spends creating jobs is a penny that Apple (or other companies) can't spend to create jobs (either currently or in the future, due to taxes). And the private sector is FAR more efficient at creating market-relevant jobs than the government is.