Intro: "According to Michael Kinsley, a gaffe is when a politician accidentally tells the truth. That's certainly what happened to Mitt Romney on Tuesday, when in a rare moment of candor - and, in his case, such moments are really, really rare - he gave away the game."
Portrait, New York Times columnist Paul Krugman, 06/15/09. (photo: Fred R. Conrad/NYT)
Romney's Economic Closet
24 February 12
According to Michael Kinsley, a gaffe is when a politician accidently tells the truth. That’s certainly what happened to Mitt Romney on Tuesday, when in a rare moment of candor - and, in his case, such moments are really, really rare - he gave away the game.
Speaking in Michigan, Mr. Romney was asked about deficit reduction, and he absent-mindedly said something completely reasonable: “If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy.” A-ha. So he believes that cutting government spending hurts growth, other things equal.
The right’s ideology police were, predictably, aghast; the Club for Growth quickly denounced the statement as showing that Mr. Romney is “not a limited-government conservative.” On the contrary, insisted the club, “If we balanced the budget tomorrow on spending cuts alone, it would be fantastic for the economy.” And a Romney spokesman tried to walk back the remark, claiming, “The governor’s point was that simply slashing the budget, with no affirmative pro-growth policies, is insufficient to get the economy turned around.”
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That's why there is so much more bang for the buck (multiplier effect) in getting money into the hands of the poorer classes: they spend it right away, creating demand, and employment. The kicker in this case is that much of it would go to cheap goods made in China, but that's a trap the corporation have built that can't be gotten out of quickly or easily.
Still, money to the poor is much more effective than to the rich who will not consume significantly more, but sit on the money or invest it overseas (building even more foreign factories and costing the US even more jobs).
The trick is look beyond the money to the real economy, employment and wages, and production. Get that right, get rid of the crooks, predator capitalists, and scams, and the whole system will be set to rights, based on good fundamentals.
It's a somewhat different problem from the economics regarding fiscal and monetary policies, i.e., government spending. It does get into things like use value vs exchange value, as Marx wrote about, and what 'real' value means, however. The poor tends to spend less on frivolous junk, though: it doesn't help survival much, which they scrape by to do.
There are many ways this culture is badly perverted, and it's going to take some time to sort that out.
Perhaps we really need to re-examine the definition of value, quality and what we hold dear. The old Judeo-Christian ideals are toast, setting your sights on the impossible standards of perfection will lead to failure. We only need to survey our surroundings and see where we are at now. e.g. we need to go to Detroit and drive through the abandoned neighborhoods to witness the results...
That's a cheap shot against Krugman. You're essentially saying that he is stupid.
Do you have any evidence for your assertion? Can you cite any article, book, etc, where he has said or written anything that contradicts what you said?
One thing to consider is that giving money to the poor might not increase consumption very much, either, as it may go toward decreasing their debt.
As for the multiplier effect, see http://money.cnn.com/2008/01/29/news/economy/stimulus_analysis/index.htm
Moody Study:
[...]
In findings echoed by other economists and studies, he said the study shows the fastest way to infuse money into the economy is through expanding the food-stamp program. For every dollar spent on that program $1.73 is generated throughout the economy, he said.
"If someone who is literally living paycheck to paycheck gets an extra dollar, it's very likely that they will spend that dollar immediately on whatever they need - groceries, to pay the telephone bill, to pay the electric bill," he said.
[...]
http://www.truthout.org/neither-stimulus-nor-austerity-will-solve-crisis-third-way/1329937798
Neither Stimulus Nor Austerity Will Solve This Crisis: A Third Way?
Saturday 25 February 2012
by: Steven Hill, Truthout | Op-Ed
[...]
While giving money to the poor MIGHT result in them paying down debt, it would at worst have the same result as giving it to the rich (or letting them keep more). That's because by definition, most of that debt will be owed to people who had excessive funds in the first place, i.e. the rich.
And since they will now be paying less in interest in the future, they will actually have more money available to spend over the long term than they would have previously. So still probably a net increase in consumptive spending over the long term.
Investments made during the Great Depression, T
the TVA, the bridges and dams, put people to work then and are paying dividends to this day. The GI Bill, an investment in education, and the interstate highway system, transportation infrastructure, are both magnificent examples of government investments that helped individuals initially, and returned value thousands of times greater over time.
No one has ever been able to show me the return on investment in a nuclear submarine or yet another new fighter jet.
I don't think George Washington would have totally eliminated the army and navy, but he was making a point: that if permitted the military would drain the resources of our country so that it could not deal with the purpose of government: to provide for the general welfare of our people.
Now, we Americans have this little fantasy about how a War will solve our problems. So we have a War on Poverty. Didn't work so well did it. And then a War on Drugs. How's that working? And now we want to have a War on Terror... Can Americans really be that naive? or is it just stupidity?
What is the purpose of war? I got a quick answer: war is meant to keep economic powers in power without the hard work of real economic competition, to usurp and stall real innovation especially innovations that challenge the power of the fiat financial monetary system. That's my story and I'm stinking to it!
Insofar as what could replace our current system? There are many ideas most of which are based on resources as per permaculture instead of agriculture/scarcity of resources creating wealth instead of abundance creating wealth.
(http://www.youtube.com/watch?NR=1&v=yh_-DUKQ4Uw) He calls it a water hammer. It gets more heat than the energy input should allow. If you don't liking breaking the laws of physics then stop reading.
Bruce De Palma (the N machine) of Massuchuetts Institutue of Technology, Denny Klein and his Aquygen 2000 HHO, Paramahamsa Tewari of India Institute of Technology, Yull Brown and Brown's gas aka HHO gas, and then several shade tree mechanics have demonstrated success. But like Ron Paul they are ignored for doing the unthinkable: challenging the economic powers that be. If any of this were possible our whole economic system would evaporate wealth and power in a matter of days! For those who are wealthy, that seems like an excellent reason to deny any innovation. If we accept it as a real POSSIBILITY, it just wouldn't happen because too many wealthy people would feel their wealth is threatened.
There is also this on HHO gas torches:
http://www.youtube.com/watch?v=xX1C7Qge5Pg&lr=1
Long story short: if this stuff is replicable (and certainly looks that way) then our current reality is a lie. You decide...
The money plowed into the system after it hit the skids was, in my opinion, was wrongly dumped into the pockets of sections of our economy who didn't intend to spend much of it--which proved true. It would be interesting to see what would have happened if those megabucks had been given out to each citizen as a share of the entire pile.
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