Scamulus: But Will It Work?

Stacy McCain makes his case for why the current scamulus bill won't work at Am Spec.

He's wrong, unfortunately. The bill will grow government, fuel growth in an entitlement class and make Democrats look like all-stars to their most loyal supporters, including government workers.

It'll achieve just what the House and now Obama and a few worthless Republicans intend.

Comments

[mark l.]

It isn't a question of whether it works...
if the media has enough 'good news', they'll make it 'appear' that it worked.

prepare for heavy reports of the stock market turning-it usually does at the bottom of a recession.
factory orders will increase, home sales will rise, company will report better earnings-
all part of a recovery from EVERY recession.

This time, rather than atributing it to the natural course of events, it will be a product of an economic messiah.

(backup caveat-while simultaneously clamining credit for the recovery, the wh will be spinning the jobs loss as a product of the previous admin.)

[templar knight]

Doesn't matter, mark. The huge increase in the money supply without a corresponding increase in productivity will cause a surge in prices, and inflation will kick in. The exact number is a mystery because other factors play into the markets, but an inflation rate in the neighborhood of 10% is possible within two years.

[Lala]

I just spent a few hours listening to the John Batchelor show while driving. It all sounds so ominous.

[mary]

Does he have transcripts of his programs, Lala?

[Jana]

But will it win over the sacred "independent" voter after which both political parties lust?

This bill buys off the same constituencies that already are disposed to vote D. I'm not sure runaway inflation and bankrupted entitlement programs are going to charm those that aren't already firmly in the D column.

[Lala]

Mary,
I don't know but I found this re a podcast. I'll keep searching. I think I was listening to WOR AM NY. I switch between that and WABC, so I'm not positive which one it was.

http://www.mediafly.com/Podcasts/Episodes/John_Batchelor_118

[Lala]

Mary,
Here's where you can find the podcast of tonight's John Batchelor show

http://thunderpigblog.blogspot.com/

[WBestPresidentEver]

I was just wondering if maybe Obama could stimulate my dishwasher. It seems to have quit on me.
While his crew is stimulating my dishwasher maybe they could also stimulate my oven. Seems the igniter for the glow bar went out.
My car needs washing too.
Probably could use an oil change. Maybe a tuneup is in order as well.
Also, my house could use a good steam cleaning on the outside.
The carpets need to be cleaned on the inside. It could also use a house cleaning. Maybe they could send a mobile dog/cash washer person by as well to groom my 3 dogs and my one cat.
I will need a landscaper to come and prepare a flower garden for the spring and put down new pinestraw.
Now that would put like 10 or more people to work.
It would aslo stimulate the economy. SPARK PLUGS, OIL, NEW DISHWASHER, NEW PART FOR OVEN, water would be used for the steam cleaning, gas would be bought for all these folks to get here and then those cleaning supplies would be bought (furniture polish and carpet cleaner and such) pine straw, flowers, furtilizer, dirt for the garden.
Now think about it.
If we "all" got a big fat check courtesy of Obama mama to do these things and spent it on these things we all need doing then we alone could put some SPARK INTO THE ECONOMY.
Instead....we will get a new water park in some state god knows where and an icebreaker, and some new harleys, and new office funiture and a frisbe park and a water slide park and a golf course clubhouse, and some honey bee insurance and a fish thing redone some damn where, and new cars for goverenment workers and it goes on and on.
That will not make me happy, but my personal requests might even make me dream of Obama at night. LMAO.
Who are these people that put this damn bill together, are they from another planet ?
Build a space craft to hold all of congress, and the president and all his men and ignite that sucker and send them back to that frigging planet they came from.

Now that would be all we need to do to stimulate the good ole USA.

What do think ??
LOL

[Lala]

They killed the water park.

[mark l.]

tk-

I'm with you on the inflation, it will come.

I'm in the awkward position of wanting it to come before the midterms, as opposed to after midterms...it is an eventuality, but I think the timeline is much longer, which IS against the conventional wisdom of when it will come.

The reason we won't see inflation soon is that the euro will remain even weaker. There might be some inflation, but you need a strong currency out there that will squeeze the dollar. If something is going to get hammered, it has to be hit against something at least as strong. You might get oil, but given the global recession, it isn't the strongest thing in the world. Maybe gold, but I'm a gold skeptic.

10% in two years...doesn't do any good if it revs up in jan 2011...we'd be stuck in a quagmire.

I think you are understating the the increase though...30% pump in an 18 month span, but starting post midterms.

[WBestPresidentEver]

I was doing a search for something else and came across this website.
I love it.

http://barackobamasucks.net/2009/01/22/the-new-obama-presidency/#respond

Scroll down from the top until you see the interesting comment.

[Fred Beloit]

Gee WBPE I don't know. This site is a little on the vitriolic side, like Kos kids go wild, turn hard right.

[anon]

Why do you think the Euro will remain weaker? From what I can tell Euorope at least Germany is in less financial trouble than the U.S., also, why wouldn't the Chinese go easy on dollars and buy some Euro's instead, which would keep the Euro higher?

What I find so crazy is that the idea that 'massive government spending will create jobs' isn't being examined at all, it is taken as a given, no one is asking what kind of jobs? are these short term or long term jobs? what happens to these jobs in 1-2-3 years when, presumably the crisis is over? no one is explaining how increasing unemployment benefits by a whopping $20 a week stimulates the economy, do they think newly unemployed people are going to go out and buy consumer goods with it? No on is asking, hey, if the Bush tax rebate didnt' stimulate the economy and that was before the banking collapse why is this new tax credit going to work?

This is just a total frenzy to do something, throw everything at the wall that is a pet program and hope for the best....it really is truly PATHETIC if this is the best that our country's economists have come up with . I have lost any respect I ever had for Paul Krugman as an economist.

[Fred Beloit]

You are absolutely right, anon. The workers are hired to build the gold-plated roller rink and finish the job. Then...what. A platinum-plated bowling alley across the street to be funded in 2010 by the dwindling number of tax payers?

And what if the roller rink proves to be a financial failure in 2010?. More government funds to keep it open for two skaters?

The strategy is poorly thought out and the details of the spending are appalling. And the worst is the business cycle may work its magic and good times may begin to return. But inflation caused by this insanity will damp any recovery.

[Lala]

Obama the con man - this article is so good, it was hard to pick out which paragraph to use -

"Then he warned Republicans not “to come to the table with the same tired arguments and worn ideas that helped to create this crisis.” He said that America “did not vote for the false theories of the past, and they didn’t vote for phony arguments and petty politics.” Translated that means the Republicans are just proposing “tired arguments,” “worn ideas,” “phony arguments” and “petty politics.” He’s not reaching out for compromise, he’s trying to poke them in the eyes.

He said, “critics say the bill is full of pet projects. When was the last time that we saw a bill of this magnitude move out with no earmarks in it? Not one.” But he never answered one to the basic criticisms on the merits —that the bill is just a Christmas tree of every liberal spending idea the Democrats have been dreaming about for 30 years."

http://thebulletin.us/articles/2009/02/09/herb_denenberg/doc498f986d9db69967532108.txt

[mark l.]

"Why do you think the Euro will remain weaker? From what I can tell Euorope at least Germany is in less financial trouble than the U.S., also, why wouldn't the Chinese go easy on dollars and buy some Euro's instead, which would keep the Euro higher?"

eu/china realtionship is much different than us/china.
us outsources to china, while old europe is trying to outsource to new/east europe.

The EU has a wonderful system of very tight monetary control, and the had an extremely strong run on gdp 2000-08, for the first time, coming in line with US growth. The reaction has been a sharp decline in the dollar from 2000-08, something like a 40% drop against the euro. It wasn't so much our weakness as their strength in economies, but many including france, outperformed us. The cheap labor in eastern europe was a godsend for production costs.

The tight monetary system's absolute, primary focus, is to prevent inflation, and I have little doubt that that is what they will try to work around. Take a look at external debt:

http://en.wikipedia.org/wiki/List_of_countries_by_external_debt

take a look at the size of the debt as % of gdp.

US is at 100%.

UK-377%
germany-160%, which is one the bright spots of the EU players.
Netherlands/Belgium-350%

try the external debt per captia function-

the debt load on the individuals?
UK-190k
germany-54k
ireland-450k
spain-176k
france-68k
norway-98k

US-42k.

The EU can't borrow money from China, at least not at a rate of return that would peak chinese interests. They have been ridiculously protectionist, loathing even the eastern europeans who come in and scoop up the modest jobs.
The fear of the 'Polish Plumber'.

The EU does not have a means of spending their way out of long unemployment or recession. The primary reason they decided upon a monetaristic system is that they had already exhausted their ability to raise money via debt. The greatest fear, inflation, produced the psycholgy that would promote tight monetary rule.

The euro won't suffer from inflation, but their economies will have to accept that they are on their own. Their recession will be much longer and their recovery will be slothful at best. Just as the euro moved up becuase growth had moved in line with the US, when it bounces around zero for a couple of years, people will be moving away from the euro.

[13yankeebravo]

when the US gets a fever, the world get takes to its death bed