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Why Government Stimulus Is Not Working...
The Looking Spoon ^ | 7-31-12 | The Looking Spoon

Posted on 07/31/2012 11:42:16 AM PDT by The Looking Spoon

A couple of days ago there was a #ConceptsProgressivesCantGrasp hashtag game on Twitter. I tweeted...

#ConceptsProgressivesCantGrasp you can't get economic growth by taxing the private sector & then give that $ to the public sector

A dumb liberal tweeted back...

"uhhh actually...yeah that is exactly how it works ....look at history"

To keep this brief. I fired back with a quote from FDR's treasury secretary that the New Deal failed (after she said it didn't). Suddenly, she changed the subject to a different burden of proof (her opinion...that's it), and history didn't matter anymore...RAH KEYNES!

The exchange got me wondering how/if I could make a graphic as simple as possible that could explain why government "stimulus" a la Democrat can't work...I did my best :-)



TOPICS: Politics
KEYWORDS: barackobama; fail; infographic; stimulus

1 posted on 07/31/2012 11:42:29 AM PDT by The Looking Spoon
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To: The Looking Spoon

OK, now, go to the deep end of the pool with your bucket. Fill it up, now take it to the shallow end and dump the water there. See how well that works? Soon, both ends will be the same depth!

Ta-Dah!

-Rex


2 posted on 07/31/2012 11:47:28 AM PDT by RexBeach (Mr. Obama Can't Count.)
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To: The Looking Spoon

I thought it was because most of it goes into public sector pension funds and the balance is used to help foreign countries catch up to us, then surpass us (like Brazil).


3 posted on 07/31/2012 11:49:06 AM PDT by GeorgeWashingtonsGhost
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To: The Looking Spoon

I’ve given up on convincing prog/lib/commies. Instead,I am waiting for the first Zombie Olympic Games to begin.


4 posted on 07/31/2012 11:50:03 AM PDT by Leep (Enemy of the Statist)
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To: The Looking Spoon
Put a sailors hat on Boama and call it the Gilligan theory of economics.
5 posted on 07/31/2012 11:52:15 AM PDT by mountainlion (I am voting for Sarah after getting screwed again by the DC Thugs.)
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To: The Looking Spoon
You left out a secondary loop after "The government funds public sector jobs with taxes" where those new government employees are often in positions where their job is to make it as difficult as possible to run a business and hire people, whether as actual regulators, tax agents or just the guys who put up orange barrels and screw up traffic about 6 months before anyone brings an actual shovel to the shovel ready projects.
6 posted on 07/31/2012 11:53:28 AM PDT by KarlInOhio (Recycled Olympic tagline Shut up, Bob Costas. Shut up! Shut up! Shut up! Shut up! Shut up! Shut up!)
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To: The Looking Spoon

To me, whether it works or not is moot. You always get “more bang for your buck” from private spending. Without going through all of the math, the gov’t multiplier on spending is
k = b / 1 - b
where b is the marginal propensity to consume. If b = .9, then
k = 9. Essentially what this means is that every dollar of gov’t spending has the potential of generating $9 of income. However, the private sector multiplier is:
k = 1 / 1 - b
If you do the math, k = 10 in the private sector. The general conclusion is the private sector lifts all boats higher than the public sector. Indeed, if you read the Consitution, the only markets the gov’t should even be in are those that produce public sector goods (e.g., a standing military, a judicial system, etc.) We have strayed so far from these principles that our Forefathers wouldn’t even recognize the place. We need to clean house in Washington, from Obozo right down to the RINO’s in Nov.


7 posted on 07/31/2012 11:58:34 AM PDT by econjack (Some people are as dumb as soup.)
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To: The Looking Spoon

Four months after the Stimulus was passed the Commonwealth of Pennsylvania put out an RFP for an IT project.

The goal of the project was to update the state’s databases and reporting systems “to comply with the reporting requirements of the American Reinvestment and Recovery Act”.

So figure a few more months letting the contract, plus 8 to 12 months to actually reprogram all the computers, multiplied by fifty states. Two years in and dime one has not been spent cause we’re still doinking around with the computers trying to get them to comply with Federal reporting requirements.

Government is STRUCTURALLY INCAPABLE of spending money (or doing anything else) efficiently.


8 posted on 07/31/2012 12:02:30 PM PDT by Buckeye McFrog
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To: RexBeach

lol. That is one of the analogies I have been using. Filling up only the shallow end of the pool.


9 posted on 07/31/2012 12:06:46 PM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: The Looking Spoon

“...its money...”


10 posted on 07/31/2012 12:07:13 PM PDT by Magic Fingers (Political correctness mutates in order to remain virulent.)
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To: GeorgeWashingtonsGhost

Government takes $100 out of the productive economy through taxes, 60 cents goes to fund government, 25 goes to fund welfare and debt and the rest gets “invested” into unproductive sectores of the economy (green industries).

Gee, why didn’t that work?


11 posted on 07/31/2012 12:09:27 PM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: GeronL

Any idiot who believes stimulus works must really be scratching their head trying to figure out why a $16 Trillion national debt has not produced paradise on earth.


12 posted on 07/31/2012 12:13:47 PM PDT by csmusaret (I will give Obama credit for one thing- he is living proof that familiarity breeds contempt.)
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To: GeronL

Good for you!

Now take a dollar out of your left hand pocket, and put it in your right hand pocket.

Doesn’t that work great?

You say you’d like to sober up? Drink more bourbon.

Want to get out of debt? Issue more bonds!

Let water out of the boat faster? Drill holes in the bottom.

What an inspiration Mr. Obama has been for all people who couldn’t find thier butts with both hands!

Adio!

-Rex


13 posted on 07/31/2012 12:21:34 PM PDT by RexBeach (Mr. Obama Can't Count.)
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To: csmusaret

bump


14 posted on 07/31/2012 12:26:59 PM PDT by GeronL (The Right to Life came before the Right to Pursue Happiness)
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To: RexBeach
My reply was going to be similar. Government stimulus doesn't work for the same reason that bailing a boat by taking the water from the front of the boat and pouring it in the back doesn't work.

Actually, for my analogy to be accurate, it would need to be raining in your bucket, to represent government's interference.

15 posted on 07/31/2012 12:32:17 PM PDT by tnlibertarian (Government's solution to everything: Less freedom.)
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To: The Looking Spoon

Pretty good! Maybe add in an arrow representing corruption and also make the arrows get smaller representing losses/inefficiencies? Or is that to much for the average libidiot to grasp? Probably...


16 posted on 07/31/2012 12:39:00 PM PDT by piytar (The predator-class is furious that their prey are shooting back.)
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To: The Looking Spoon
why government "stimulus" a la Democrat can't work.

Increased government spending to stimulate the economy is financed mainly by increased taxes, creation of money out of thin air, and/or increased government borrowing.

these lead to:

reduced saving and investment
reduced productive expenditure
reduced demand for labor
reduced demand for capital goods
reduced ratio of demand for labor/demand for consumer goods
reduced ratio of demand for capital goods/demand for consumer goods
reduced average money wage rates
reduced average real wage rates
reduced productivity of labor
reduced productivity of capital goods
reduced supply of labor
reduced capital accumulation
reduced accumulation of capital goods
reduced capital intensiveness
reduced ability to implement technological progress
reduced total productive ability
reduced rise in standard of living for the average wage earner

If someone wants to stop economic progress and cause economic stagnation of retrogression, and end the rise of prosperity, the above list is a good way to start.

17 posted on 07/31/2012 1:25:43 PM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: Magic Fingers

Thanks! I’ll fix when I get a chance.

You know, I went through it several times before posting too...oh well.


18 posted on 07/31/2012 4:11:03 PM PDT by The Looking Spoon
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To: The Looking Spoon

I usually wouldn’t be so picky, but since it was a nice-looking semi-official poster and all...:-)


19 posted on 07/31/2012 5:14:14 PM PDT by Magic Fingers (Political correctness mutates in order to remain virulent.)
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