Fun the coupon program better with an executive order.
I know its hard to grasp after the last 8 years, but Constitutionally the US is not an executive dictatorship where the President can just allocate funds to any purpose he chooses on a whim.
I love this sort of double standard. When you want to erase a hard drive, it takes these sorts of extreme measures. But when the hard drive fails on its own, your data is toast!
Fragments of working files are pretty inadequate to the people who own them, compared to the full files, but if the data is sensitive, they can be pretty useful to an opponent, compared to having nothing.
The Keynesian route is a dangerous one. In my humble opinion we need to take a monetarist route out of this hole...
Uh, the Federal Reserve has been desperately doing everything possible in terms of monetary stimulus, cutting interbank loan interest rate targets to essentially zero (though rates had already fallen on their own to zero) and pumping out something like $2 trillion dollars to increase the money supply.
This has had, essentially, no effect. (Of course, Keynesian policy includes everything in the monetarists' arsenal as a component of stimulus, where Keynesians and monetarists disagree, outside of interpretation of past events, is whether fiscal stimulus is useful in addition to monetary stimulus.)
As Keynes' system says, it's fine to create deficits during an economic downturn, in fact it's encouraged to stimulate growth, but it can't work without paying off those deficits when times are good and saving.
Uh. yeah. This is exactly what Keynes says. Since you seem to agree with Keynes, here, I don't see why you are describing Keynesianism as "dangerous". What is actually dangerous is forgetting Keynes after the recession is dealt with, which is unfortunately common.
That doesn't mean that restricting oneself to the tools that have proven ineffective is the better choice when you are actually in a serious recession.
We're (UK, US, most of the western world) carrying around an almost unprecedented level of debt, debt which we have made no real effort to pay off. Even during the 90s and early 00s when business was booming, we continued to borrow.
The gross debt increased, but the gross debt isn't what is most important, the debt to GDP ratio is, and that did not grow for all of that period. Taking a longer view, the debt to GDP ratio fell for most of the post-WWII period until Reagan took office, grew under Reagan, exploded under the first Bush, grew at a slowing rate under Clinton until 1996, fell for the remainder of Clinton's term, and then exploded again under the second Bush.
We are, as a result of the last few years, in a particularly bad starting point going into this recession, and there is considerable reason to think that, as a result, fiscal stimulus, while still more likely to be productive than further monetary efforts, will not be as effective as it would have been if the debt:GDP ratio going into the stimulus efforts was lower. That's not a reason not to pursue fiscal stimulus; instead, its a reason to be very careful that any spending programs or tax cuts are structured to be temporary (i.e., have definite sunset provisions), and to make sure that once the economy gets going policies are adopted to bring the debt to GDP ratio back under control. Its something the US can do, and has actually done pretty consistently in the post-WWII period when the President was not a Reagan or a Bush.
Secondly, there's a valid Constitutional argument that the federal government does, indeed, have a role in roads under the authority for interstate commerce.
So long as roads are used by the postal service, there's an even better argument that the federal government has a role in roads under the Article I power related to postal roads.
I've never argued that roads need to be privatized but I have argued that we don't need a multi-thousand employee DMV when a private company can do it much more efficiently.
Please provide evidence that a combination of a private contractor would rationally be expected do the work of the DMV of any particular state "much more efficiently". AFAICT, the only thing backing this idea is the quasi-religious faith that the private sector is always more efficient at doing everything
If they really want to stimulate the economy they could just have the proposed two month tax holiday, as in no income taxes for two months.
There's considerable reason to expect that such a tax holiday would mostly result in more saving, and not stimulus at all; jobs for people that would otherwise out of work get more spending to happen; one time payouts that are heavily weighted to those with the most income to people that have income streams in a time of economic uncertainty just get the recipients to put money away to shelter themselves better against the uncertainty.
They don't want people who actually pay taxes to realize just how much they are paying.
Which is why they require everyone paying taxes to fill out and sign forms every year which detail exactly how much is being paid. Its the "rub it in your face so you don't notice it" plan.
WTF?
People who don't pay taxes won't like not getting money and they are the most reliable voting block money can buy
Likelihood of voting is actually positively correlated to income, generally, so this is wrong.
It goes against the whole class warfare construct that politicians work so hard to keep
Why is it that policies that disproportionately reward the rich (or harm the poor) aren't considered "class warfare", while those that do not, whether egalitarian or disproportionately rewarding the poor or harming the rich are considered "class warfare"?
Letting the American taxpayer keep their money, in the form of reduced income taxes and reduce capital gains taxes, would do more to jump start the economy than any government attempt otherwise.
This isn't true, even if you limit government attempts to temporary reductions in taxes assessed on income. The rationally expected stimulative effect of reductions in those kind of taxes would be highest in a temporary suspension of payroll taxes, and lowest in a temporary reduction in capital gains taxes, and in between (and still low) in a temporary reduction in income taxes, simply because of the distribution of the burden of each kind of tax and the mean propensity to spend of the people paying that burden.
Institutions either are persons (if you are talking in the legal sense), or are simply facilities through which people act (if you are talking in the practical sense); in either case, everything done by institutions is, in fact, done by people.
"People" are not hoarding anything.
People, in fact, are. In the manners I've already described, which include both direct individual actions and actions through institutions. Merely repeating the claim that hoarding does not occur will not make it true.
Instead, the Citibanks and Chases of the world are trying to shore up their reserves to get back to standard, federally-mandated levels.
False, because they are already above the federally-mandated levels.
Even so, other institutions (like the Federal Banks in England, EU, USA, Japan) are pumping in money like crazy, buying troubled assets, and loaning money for peanuts.
Yes, that's what they are doing to banks. However, the money supply is not expanding the way you would expect with these actions that are being taken to get banks back in the business of pumping money out, because the banks are hoarding money, which is why the ratio between M1 and the broader measures of the money supply have taken a precipitous drop.
The other part of the problem is, you can't make people want to borrow money.
People want to borrow money; over the last year, almost every private lender of student loans has pulled out of the market as part of the general withdrawal from lending. The number of people seeking loans didn't significantly drop, just the availability.
Keep in mind, also, that what was once "saved" is now 40% gone with the stock market collapse.
Uh, no. You seem to think that all, or even most, savings are invested in stocks. This is incorrect.
People listening to talking heads like to echo the phrase, "frozen credit markets", as if it was a way to grab a suit at some bank and shake them for not making loans.
I don't know anything about your fantasies about what "people listening to talking heads" are thinking, but "frozen credit markets" are a fact, and have nothing to do with whether or not there is a way to grab a suit at some bank and shake them for not making loans. (In fact, there is a way to do that, but it doesn't help the problem, and is likely to get you in trouble for, among other things, assault and battery.)
The observation of frozen credit markets and hoarding is directly relevant, though, to evaluation of policy responses to the crisis. For one thing, the observed behavior should make it pretty clear that neither the kind of monetary stimulus being pursued frantically by the Fed, nor the kind of bank bailout that has been pursued under, e.g., the enormous TARP boondoggle, are going to do much good no matter how much money you pump out to banks through them, so they aren't the right areas to focus on in terms of government policy.
But implying that lenders are just altogether refusing to lend from some massive, secret reserve is specious. You do, after all, have to have a reserve from which to loan - even when working reserve ratios.
There is nothing "secret" about the reserves that aren't being fully utilized. The fact that interbank loan rates fell to near zero well before the Fed moved the target rate to 0.0-0.25% is evidence that there is an extraordinarily low ratio of demand to supply for overnight loans to meet reserve requirements, which itself is evidence that banks are, in general, operating substantially farther from the limits imposed by reserve ratios than is normally the case. Or, IOW, that banks are, in fact, hoarding their reserves.
Why would these impoverished nations spend $100 per machine, when what the kids need are books, pencils and a roof
Because, for one reason, a $100 (or even $175) machine designed to work as an e-book reader, backed by a project that was also developing free educational content, and which also was supplying low-cost satellite downlink stations supported by donated satellite time to provide internet access to remote locations, provides a less expensive way to distribute the same kind of material that would otherwise be distributed in the form of books in remote areas that often don't have decent road systems. You can replace a lot of books with one e-book reader with even occasional net access for delivery.
Books aren't cheap, even when you are just dealing with the printing costs.
They were actually quite hostile toward selling it in America or developed world.
No, they were hostile to changing the design for the developed world (since they are a nonprofit with a specific mission that that would contradict), and they were hostile to selling to any agency other than national ministries of education or something similar, because dealing with smaller lots and smaller entities drives up per-unit costs.
Actually, the US savings rate has gone up in the recent economic crisis.
So claiming you have to take money away from people who are hoarding it is silly, because no one IS hoarding money.
Saving isn't the same as hoarding. But people are hoarding, too, by keeping less money in time deposits and more in demand deposits, by extending less credit (especially in the case of banks), etc.
Your entire post bases from one grand assumption: Someone, somewhere, is sitting on a pile of cash like Tiamat sits on a pile of gold.
You seem to be confusing "money" with "cash". Cash is a form of money, but not the only or even the most common form of money. Putting money in places where it doesn't enable creating as much more money as where it was previously (keeping more in demand accounts and less in time deposits), not creating additional money (via extending credit) when you have the capacity to do so and were previously doing so (as US financial institutions have recently been doing), etc., all are forms of hoarding in a system where most money exists in the form of notations of account and is creating by private lending in a fractional reserve banking system.
The economy didn't improve for a long time under Roosevelt either.
In fact, the recession that began in August of 1929 ended in March of 1933, just a couple of months into Roosevelt's first term, and the next four years saw what was, a pretty decent expansion; but things had gotten so bad in the long recession that preceded Roosevelt's term that even with that strong growth, conditions were pretty bad throughout the expansion. (e.g., unemployment, while it improved quite a lot from the 25%+ it had reached at its worst, never got out of the double digits, either during the 1933-1937 expansion, or even, IIRC, prior to WWII.)
So its pretty completely inaccurate to say that the economy did not improve for a long time under Roosevelt; it stopped getting worse and started improving almost immediately under Roosevelt, its just that the economy had gotten so bad that it could improve substantially and still be miserable. Which is one reason why we might not want to let things get as bad as they did in 1929-1932 before working really hard to turn them around.
That's because you were abusing the terminology and not saying what you meant.
(Which you still failed to do, but at least now its easy to figure out what you meant; you simply meant debt increasing less rapidly than GDP growth, which has nothing to do with one being "real" and the other being "nominal".)
Which, you'll note, is exactly what I said should happen.
This is, of course, not what has always happened in the past (contrary to your description that what you were describing is the way things are always done). Quite often the debt has expanded faster than the GDP growth even during expansions (and, though rarely, the debt has sometimes even gone down in absolute terms.)
I really just wanted to read the discussion and not get involved - but one comment I have not seen is simply this:
Any "Stimulus" from money being spent is going to have 0 impact on the US or the creation of US jobs.
Then you haven't read the discussion very well, since that comment, inaccurate as it is, has been made many times.
Let's face facts here people - unless the money is spent on "American produced goods and services" the money will go everywhere other than the US.
What you just said is that unless the money is spend in the US, it will be spent somewhere other than the US. This is, of course, rather trivially true, since all the stimulus proposals made have involved spending money in the US, its also pretty irrelevant to any actual proposals on the table.
For example: John Q. Public runs on down to Walmart and says, "Geez that there TV and blueray player looks good - Im gonna buy that with this here stimulus check" Where did the money go?
To Wal*Mart's shareholders, to the local government to which Wal*Mart pays sales taxes and property taxes (or, if the property is leased, to the property owner and then to the government to whom they pay property taxes), to the companies to the Wal*Mart store pays for utilities and other services, to the Wal*Mart stores employees, and to Wal*Mart's shareholders, and to whoever made the product.
China, Korea, Japan, etc...
Well, yeah, a few of the above categories include people in China, Korea, Japan, etc.
So let's face it - People don't think. You want a stimulus package that creates jobs and boosts America's economy - Hand out a voucher only redeemable at "X" American companies (not an American Subsidiary of X Global Company or better still - MADE, PRODUCED, DELIVERED, CREATED in the U.S. of A.). Forget handing out the cash, otherwise your stimulating someone else's economy.
How about if the government just hires people legally authorized to work in the US to build infrastructure in the US? Seems a lot more productive of public value than handing out vouchers.
The point is that private enterprise is much better suited to wisely spend money than is government.
That article of faith has little evidence.
Central economic planning by the government never works.
This is no more true than say that systems without central economic planning by the government never work; all successful economies feature a wide range of relatively free enterprise to which some regulation applies but where government does not make detailed allocation decisions, and some degree of government direct planning and participation in the economy. And certainly there is evidence that the exact kind and degree of government involvement that is desirable varies by conditions.
Certainly, complete central planning is not desirable, but no one that I am aware of is arguing for that.
Another example would be two headlines here on slashdot. I think they were from this summer, tho perhaps earlier. First: CA bans incandescent light bulbs, mandates CFLs. A few days later, we were treated to this: Researcher gets efficiency of incandescent bulbs up to match that of CFLs.
Since neither of those events actually occurred, the only thing I can think of that that is an example of is why you shouldn't trust Slashdot headlines as a source of reliable inforamtion (assuming that even the headlines are accurate.)
(Several things related to that have actually happened in the last couple years: the EU decided to phase out incadescent lights by 2012, a California lawmaker proposed a similar rule in California that never passed, GE announced work on high efficiency incandescent (HEI) lights which it said could eventually match CFL efficience, GE abandoned work on the HEI lights to focus on LED lights, which, while currently more expensive than CFLs, are already more efficient.)
The trillion plus we've spent so far should be proof enough that gov't spending is NOT the way to go here.
If one assumes that all government spending is exactly equal and that the only choice is whether or not the government should spend money rather than whether it should and, if so, how it should, that would make some sense. Though it still fails to consider it against alternatives.
In the real world, it makes even less sense, since there is a real question of how funds are spent, and plenty of reasons to think that, of the spending options available to the government, those that it has chosen are particularly poor.
All of this pretends creating jobs is a magical and wonderful thing.
No, it is based on the fact that, in the real world, creating jobs is a good thing. Neither "magical" nor "wonderful" are relevant.
In an ideal economy no jobs would be needed
No, in an ideal world no jobs would be needed, but since such a scenario would not involve scarcity, it would arguably not even have an economy, which is a means by which limited resources are distributed.
machines would do the work and wealth would just be distributed to citizens who merely invested it in their choice of machine warehouses.
Certainly, there is some attraction to such a pure-capital economy (though I wouldn't call it ideal.) But its not the real world, nor is it something realistically attainable in the short term. Consequently, in the short-term, dealing with the actual consequence the actual recession has for actual people, creating jobs is a good things.
Inasmuch as it is possible for people to even begin to approach the kind of life they would have in your proposed pure-capital utopia, they need investable capital -- i.e., money to invest beyond that necessary to spend for self-maintenance. For most people that haven't inherited large sums of money or won the lottery, that means they need a job. So, even if we accept that what you propose is the ideal economy we should be striving for, we need people to have jobs now so that they could have capital to invest in the "machine warehouses" if those ever get built, or in real productive enterprises which actually exist in the interim.
Clean a floor and get paid $100 and you've moved $100 around. After the fact you still have one floor and $100.
You are presuming that a clean floor has the same value as a dirty floor, which is exactly the same mistake as assuming that a block of gold ore has the same value as the gold it could be refined into which has the same value as, say, the spacesuit helmet visor screen that could be produced from the refined gold.
Also, you have $100, and the person who paid you to clean their floor has a clean floor that used to be a dirty floor; and clearly, the clean floor is worth $100 more than the dirty floor to them, otherwise the exchange wouldn't have taken place.
Make a blanket and sell it for $100 and you've turned $20 of raw materials in $100 worth of raw materials leaving you with $100 and $100 worth of materials
Wrong. Make a blanket and sell it for $100 and you've turned some quantity of raw materials into $100 of finished product, leaving you with $100, and the person who bought the blanket with a product worth $100 to them. In either case, the person paying you has received something worth $100 to them, and given $100 to you.
If services didn't produce value, no one would pay for them.
The Fed's balance sheet was spent on the first bailouts, and the US is now printing money to cover the current bailouts. The government is manipulating M1.
Wrong. The US government is borrowing and spending money, not printing it, for all of the bailouts (most of which are really under the umbrella of one bailout, the TARP program.) The Fed, distinct from the government, has also extended some $2+ trillion in additional loans as part of its own bailout contemporaneous with the other bailouts, which is manipulating M1, but is entirely separate from any bailout approved by Congress.
The Fed effort is pretty hard to unravel as to where the money has gone and what effect it has had, but it seems likely to me to be a very bad idea (and it is probably the proximate cause, or at least a major factor, in the collapse of the M1 multiplier.)
You're confusing the issue by implying that they are not directly related. Manipulation of M1 leads to an even worse trend on the second graph.
Simply repeating that claim does not provide any reason to believe its true. There is no rational reason to expect that the M1 multiplier (which isn't a measure of [a] the stimulative effect of anything, or [b] any effect of government debt or spending) would have any effect on the average stimulative effect of additional government spending.
I love how people like yourself, Bernanke and Paulson concede under pressure that deficit spending is disturbing, but at the same time hold a Keynesian attitude of printing money to "stimulate" the economy.
I'm not anyone like Bernanke or Paulson, and I'm not conceding anything under pressure. Nor I am conceding, or even claiming, that deficit spending is disturbing. What I'm saying is that properly-directed deficit spending has a substantial utility under certain circumstances (including, relevant to the present discussion, responding to a recession), but that that utility is undermined by a high debt:GDP ratio. Consequently, it is generally desirable for government to reduce the debt:GDP ratio during expansions (either by reducing the debt outright or by increasing it at a rate slower than the rate of expansion), and only engage in substantial deficit spending (that is, deficit spending such that the debt:GDP ratio is increased) when it is necessary to respond to an emergency such as a recession.
Nor have I (nor Keynes, to my knowledge) advocated printing money, specifically, to stimulate the economy. What I've advocated is fiscal, not monetary, stimulus, which includes borrowing money (and could conceivably include targetted taxes, though generally that's counterproductive compared to borrowing, as well) to support increased short-term spending. Keynes did encourage both monetary and fiscal stimulus, but not printing money, AFAIK; instead Keynes favored easy money policies such as reduction in interest rates. In my view, the evidence is pretty clear that monetary policy is somewhat useful in smoothing minor economic fluctuations, but its pretty clear that the present crisis has gone beyond what any monetary policy can do much to deal with, at best, monetary policy can avoid making things worse (and I'm not particularly convinced that the Fed is even meeting that bar.)
There's only one correct attitude during a recession: liquidate bad debt and expose fraud.
This is certainly an article of faith in some circles, but there is neither evidence nor even any coherent theory supporting it.
Well I'd presume the plan to resolve high debt:gdp in a fiat system is what it usually is. Debt is in nominal dollars while gdp is in real dollars.
That's both false and not even sensible; the ratio is always calculated using current (i.e., nominal) values for both, and is a unitless value. Nominal vs. real is only a distinction that matters when you are comparing values in $ across different years; since the ratio is a unitless value, not one in $, the issue doesn't arise.
When you borrow the $100 now, you have to pay interest on that to the FED, which is not Federal.
Uh, no.
When the government borrows money, it issues treasury security (e.g., T-bills), which are sold, generally at auction. It pays interest to the holders of those securities. The Federal Reserve does buy some of the securities, so do domestic and foreign private investors and foreign central banks. (Actually, because they are sold at auction, it doesn't pay "interest" in the traditional sense on many securites, it pays the face value of the security at maturity, this may be more than it received for the security, it may be the same or less -- recently, short-term bills have frequently been selling at or near no discount from the face value.)
Example: any gov't bill will say $x dollars ProjectA, and $y dollars for ProjectB. 6 months later, someone at a private business develops MethodC, which is 10 times more efficient/reliable/etc than A or B. Too bad for C. Since A & B are getting the funding, C, the better technology gets ignored for the next 10 years, as A & B can't handle the load, until someone says, hey, whatever happened to C?
Actually, plenty of government bills say "$X for Broad General Purpose A" and provides some specified executive agency broad discretion in how to meet that broad general purpose.
This is particular true of bills passed to provide resources to an administration to address an emergency. (This can, of course, have its own problems, particularly if there is no accountability for how the purposes is addressed, as has been argued to be a serious problem with the recent TARP "bank bailout" bill.)
Your entire argument seems to rest on the idea that it is somehow impossible for legislation providing money to address a problem not to be excessively specific as to how the money is going to be spent. This is pretty clearly not the case.
Maybe the reason the private sector is scared of the risks is because they're...risky?
Quite.
Why, then, does it make sense for our government to take that risk.
Because the government is looking for a different results, one whose risks, if any, are almost completely unrelated to the risks that face private investors in acheiving the results they seek. When the government spends money for stimulus purposes, it is looking to get people working, get them paid, and get them spending money in the short-term. It usually is also looking at getting the job done that those people are being paid to do, for some long-term social benefit. The first of these, which is the most important in terms of economic stimulus, is fairly low risk. The second is often also low risk, though there is some speculative component in any such investment. When a private investor invests, they are looking to get money back on their investment; the social utility of employment and spending, and even the long-term social utility of the thing beings built by the enterprise that is being invested in are not the outcomes being sought by most dollars invested privately. The risk associated with the private goals is completely unrelated to the risk associated with the public goals.
That was the consequence of central planning - something that a lot of people here seem to support.
It was, more accurately, the result of maintaining a massive military and security apparatus in an effort to control the world (in, of course, a spending competition with the US) that its economy couldn't sustain indefinitely. It wouldn't have mattered much how the rest of the resource in the economy were directed in the long-term outcome, though the path to failure might have looked a little different.
Which is something the US might keep in mind as its military spending continues to equal or exceed that of the rest of the world combined.
Right. And the multiplier has fallen below 1.0 [denninger.net].
The M1 multiplier (that has fallen below zero) is the ratio of the M1 meaure of money supply to the Adjusted Monetary Base measure. . It is fair to say it is something of a measure of the utility of policies that seek to stimulate the economy by increasing M1 (though even there it is limited, since even the Adjusted Monetary Base measure is just a different measure of money supply, not a measure of economic activity); it has little to do with either the velocity of money (the source of the "multiplier effect" being discussed in this thread, which is not the same thing as the "M1 multiplier" you point to; the "multiplier effect" relates to how often a particular dollar in the money supply is spent, not the ratio between two different measures of the money supply) or the ability of the government to stimulate by borrowing dollars from domestic and foreign holders of dollars and spending it in particular, focussed areas (since such policy does not rely on manipulate M1.)
The author of that piece attempts to confuse the issue by posting a different graph that shows a falling trend in how effective stimulative government deficit spending has been on average recently, and attempting to suggest, without any real reason, that the two graphs are directly related and indeed that the M1 multiplier graph says that the trend shown in the other graph is actually worse than it appears. This is not rational. The second graph does show a long-term problem, and particularly does show why, once this recession ends, the US government must, in the subsequent expansion, begin to pay down the debt or at least stop expanding the debt faster than the GDP during expansions, because if we keep deficit spending through expansions so that the debt:GDP ratio keeps going up, we'll soon reach the point where we can't use deficit spending to stimulate the economy when it is in recession. But, contrary to Denninger's alarmism, the M1 multiplier going below 1 doesn't indicate that the trend in debt utility shown in the second graph is worse than that graph actually shows. They are completely different issues.
First of all, most people don't hoard their cash, contrary to popular belief.
Most people don't actually keep all of their money in cash stuffed in a mattress, true. OTOH, there is plenty of subtler hoarding going on.
(1) When banks are perceived as unsafe, people do tend to keep more of their money as cash. (2) With less economic certainty, depositors are more likely to put funds into demand accounts rather than time deposit accounts; this doesn't seem like "hoarding" at first glance, but because higher reserve requirements apply to demand deposits than time deposits (nonpersonal time deposits in the US impose no reserve requirements on banks!), it is effectively hoarding, (3) Banks effectively hoard money (actually, reduce the money supply, but the economic effect is exactly identical) simply by not lending out as much money as they could under laws imposing reserve requirements (note that reserve requirements are about 10% of transaction accounts like demand deposits, and 0% of nonpersonal time deposits, so banks have huge leeway in how much money they can lend of what is deposited.) This is, of course, a particularly prominent feature of the present credit crisis.
Furthermore, the people who pay the VAST MAJORITY of taxes (the ultra-rich top 1%) don't hoard their money.
Actually, the ultra-rich have the lowest mean propensity to spend, and so money in their hands produces, directly, the least economic activity, dollar-per-dollar. They do tend to save/invest a lot, which means they can contribute a lot indirectly to growth. But that depends on how they save and invest. But they make the same kind of shifts in bad economic times that amount to hoarding discussed above. And, even in continuing to invest, right now what is happening is that demand for government debt (perceived as essentially risk free) is going up so much that short-term T-bill rates over the last month actually dipped at least once into negative territory and are hovering around zero: that is, investors are willing to pay as much or more now than they will get at maturity for short-term government debt.
Regardless of the social utility (in terms of job creation, etc.) of private investment overall, the current economic situation has driven the perceived utility to investors of such investment so low that they are desperate to do anything else possible with their money. So to realize the social utility of money pumped into the domestic economy, the government (which exists to realize social utility, not to make direct profits) needs to pump the money in. And because the incentive for private actors to invest in the private sector right now is low, its exceptionally cheap for the government to borrow money to do that right now.
As to your argument that the hypothetical dollar may not stay inside the US this is another extremely outdated mercantilist concept.
Er, no, its not. Its purely fact. Some uses of money have higher domestic velocity than others. Mercantilism is a particular set of policy preferences, which differ very greatly from what I am proposing.
The belief that we should somehow magically maximize exports while minimizing imports (which is impossible because in the long run imports and exports must be equal) in order to keep jobs in the US.
That's not the idea I'm promoting at all. Promoting, as short-term policy stimulus, policies which focus spending on uses of money which are rationally expected to have a high velocity in the domestic economy, while attempting to derive revenues from sources that would otherwise tend to use money in ways that do not have a high velocity in the domestic economy is not the same as a mercantilist policy of erecting barriers to prevent imports while attempting to promote exports.
But even saved money gets spent by those that borrowed it from savers.
It might. It might not. It particularly might not when, as is the case right now, deflation occurs, as $1 tomorrow becomes worth more than $1 today, so it makes perfect sense from the perspective of each individual spender to hold cash and defer spending, since cash then has a positive real rate of return.
There is very little money sitting idle.
Not only does hoarding result in money sitting idle, right now there is money outright being destroyed as banks just don't extend credit at all (at least, not in the quantities they have until recently), while they continue to accept deposits and payments on existing debt. Its not like the actual money supply is some fixed number based on the number of pieces of paper currency printed and in circulation; most money exists entirely as notations of account, and while reserve limits and similar regulations limit the amount of some forms of money that can be created, there is nothing that keeps the money supply constant.
All the government is doing here is diverting saved money that would be spent by borrowers in other parts of the economy and redirecting it to government projects.
Even if this was true (which it is not, even if you refer to the world economy when you say "the economy"), that could still create jobs in as not all spending is equally effective at job creation. This is especially the case if you talk about creating jobs in the US economy, since the economy from which the US government takes money to spend when it borrows money is not exclusively the US economy.
It doesn't create jobs. It reallocates jobs.
No, it reallocates money. Whether or not it creates more jobs than would otherwise be the case depends on how efficient the use it puts money to is at creating jobs as compared to the uses to which the money would otherwise have been put. This is also true (and even more relevant) if you add "in the US" after each instance of "jobs" in the previous sentence.
30 billion spread across 1 million workers comes out to 30k a year for one year. This is to say nothing of the administrative costs.
Administrative costs create jobs, too; also, spending can create jobs with a greater total salary than the amount of spending, since each dollar can be spent more than once. The stimulative effect in the domestic economy of spending isn't just a product of the amount of money spent, but of the velocity of money in the domestic economy (how many times each dollar is spent in the domestic economy) resulting from that spending.
You will get NO net jobs. Every penny spent on a "stimulus" must be taken from taxpayers, either directly or indirectly, either now or in the future, and that penny will NOT be spent creating jobs elsewhere.
If every use of money (including taking it in cash and stuffing it in a mattress or lighting it on fire) were equally effective at creating jobs, this argument might be relevant (except that the relevant thing isn't that every penny must be taken from taxpayers now or in the potentially-infinitely-distant future, but that every penny must be taken from some other use right now, whether its in the form of taxation or borrowing from someone who has money and would use it for something else if they weren't lending it to the government.)
Of course, not every use of money is equally effective at creating jobs, and even moreso not every use of money is equally effective at creating jobs within the US economy, so its pretty clear that changing how money is used by either taxing or borrowing money that would be used for one purpose if it were not taxed or borrowed and applying to a different purpose can create more (or less, depending on the uses the money is taken from and the uses it is put to) jobs than would otherwise be the case, and even more certainly the case that doing so can create more jobs in the US economy than would otherwise be the case.
Slashdot Mirror
I know its hard to grasp after the last 8 years, but Constitutionally the US is not an executive dictatorship where the President can just allocate funds to any purpose he chooses on a whim.
Fragments of working files are pretty inadequate to the people who own them, compared to the full files, but if the data is sensitive, they can be pretty useful to an opponent, compared to having nothing.
There are different perspectives at work.
Uh, the Federal Reserve has been desperately doing everything possible in terms of monetary stimulus, cutting interbank loan interest rate targets to essentially zero (though rates had already fallen on their own to zero) and pumping out something like $2 trillion dollars to increase the money supply.
This has had, essentially, no effect. (Of course, Keynesian policy includes everything in the monetarists' arsenal as a component of stimulus, where Keynesians and monetarists disagree, outside of interpretation of past events, is whether fiscal stimulus is useful in addition to monetary stimulus.)
Uh. yeah. This is exactly what Keynes says. Since you seem to agree with Keynes, here, I don't see why you are describing Keynesianism as "dangerous". What is actually dangerous is forgetting Keynes after the recession is dealt with, which is unfortunately common.
That doesn't mean that restricting oneself to the tools that have proven ineffective is the better choice when you are actually in a serious recession.
The gross debt increased, but the gross debt isn't what is most important, the debt to GDP ratio is, and that did not grow for all of that period. Taking a longer view, the debt to GDP ratio fell for most of the post-WWII period until Reagan took office, grew under Reagan, exploded under the first Bush, grew at a slowing rate under Clinton until 1996, fell for the remainder of Clinton's term, and then exploded again under the second Bush.
We are, as a result of the last few years, in a particularly bad starting point going into this recession, and there is considerable reason to think that, as a result, fiscal stimulus, while still more likely to be productive than further monetary efforts, will not be as effective as it would have been if the debt:GDP ratio going into the stimulus efforts was lower. That's not a reason not to pursue fiscal stimulus; instead, its a reason to be very careful that any spending programs or tax cuts are structured to be temporary (i.e., have definite sunset provisions), and to make sure that once the economy gets going policies are adopted to bring the debt to GDP ratio back under control. Its something the US can do, and has actually done pretty consistently in the post-WWII period when the President was not a Reagan or a Bush.
So long as roads are used by the postal service, there's an even better argument that the federal government has a role in roads under the Article I power related to postal roads.
Please provide evidence that a combination of a private contractor would rationally be expected do the work of the DMV of any particular state "much more efficiently". AFAICT, the only thing backing this idea is the quasi-religious faith that the private sector is always more efficient at doing everything
There's considerable reason to expect that such a tax holiday would mostly result in more saving, and not stimulus at all; jobs for people that would otherwise out of work get more spending to happen; one time payouts that are heavily weighted to those with the most income to people that have income streams in a time of economic uncertainty just get the recipients to put money away to shelter themselves better against the uncertainty.
Which is why they require everyone paying taxes to fill out and sign forms every year which detail exactly how much is being paid. Its the "rub it in your face so you don't notice it" plan.
WTF?
Likelihood of voting is actually positively correlated to income, generally, so this is wrong.
Why is it that policies that disproportionately reward the rich (or harm the poor) aren't considered "class warfare", while those that do not, whether egalitarian or disproportionately rewarding the poor or harming the rich are considered "class warfare"?
This isn't true, even if you limit government attempts to temporary reductions in taxes assessed on income. The rationally expected stimulative effect of reductions in those kind of taxes would be highest in a temporary suspension of payroll taxes, and lowest in a temporary reduction in capital gains taxes, and in between (and still low) in a temporary reduction in income taxes, simply because of the distribution of the burden of each kind of tax and the mean propensity to spend of the people paying that burden.
Institutions either are persons (if you are talking in the legal sense), or are simply facilities through which people act (if you are talking in the practical sense); in either case, everything done by institutions is, in fact, done by people.
People, in fact, are. In the manners I've already described, which include both direct individual actions and actions through institutions. Merely repeating the claim that hoarding does not occur will not make it true.
False, because they are already above the federally-mandated levels.
Because, for one reason, a $100 (or even $175) machine designed to work as an e-book reader, backed by a project that was also developing free educational content, and which also was supplying low-cost satellite downlink stations supported by donated satellite time to provide internet access to remote locations, provides a less expensive way to distribute the same kind of material that would otherwise be distributed in the form of books in remote areas that often don't have decent road systems. You can replace a lot of books with one e-book reader with even occasional net access for delivery.
Books aren't cheap, even when you are just dealing with the printing costs.
No, they were hostile to changing the design for the developed world (since they are a nonprofit with a specific mission that that would contradict), and they were hostile to selling to any agency other than national ministries of education or something similar, because dealing with smaller lots and smaller entities drives up per-unit costs.
Actually, the US savings rate has gone up in the recent economic crisis.
Saving isn't the same as hoarding. But people are hoarding, too, by keeping less money in time deposits and more in demand deposits, by extending less credit (especially in the case of banks), etc.
You seem to be confusing "money" with "cash". Cash is a form of money, but not the only or even the most common form of money. Putting money in places where it doesn't enable creating as much more money as where it was previously (keeping more in demand accounts and less in time deposits), not creating additional money (via extending credit) when you have the capacity to do so and were previously doing so (as US financial institutions have recently been doing), etc., all are forms of hoarding in a system where most money exists in the form of notations of account and is creating by private lending in a fractional reserve banking system.
In fact, the recession that began in August of 1929 ended in March of 1933, just a couple of months into Roosevelt's first term, and the next four years saw what was, a pretty decent expansion; but things had gotten so bad in the long recession that preceded Roosevelt's term that even with that strong growth, conditions were pretty bad throughout the expansion. (e.g., unemployment, while it improved quite a lot from the 25%+ it had reached at its worst, never got out of the double digits, either during the 1933-1937 expansion, or even, IIRC, prior to WWII.)
So its pretty completely inaccurate to say that the economy did not improve for a long time under Roosevelt; it stopped getting worse and started improving almost immediately under Roosevelt, its just that the economy had gotten so bad that it could improve substantially and still be miserable. Which is one reason why we might not want to let things get as bad as they did in 1929-1932 before working really hard to turn them around.
That's because you were abusing the terminology and not saying what you meant.
(Which you still failed to do, but at least now its easy to figure out what you meant; you simply meant debt increasing less rapidly than GDP growth, which has nothing to do with one being "real" and the other being "nominal".)
Which, you'll note, is exactly what I said should happen.
This is, of course, not what has always happened in the past (contrary to your description that what you were describing is the way things are always done). Quite often the debt has expanded faster than the GDP growth even during expansions (and, though rarely, the debt has sometimes even gone down in absolute terms.)
Then you haven't read the discussion very well, since that comment, inaccurate as it is, has been made many times.
What you just said is that unless the money is spend in the US, it will be spent somewhere other than the US. This is, of course, rather trivially true, since all the stimulus proposals made have involved spending money in the US, its also pretty irrelevant to any actual proposals on the table.
To Wal*Mart's shareholders, to the local government to which Wal*Mart pays sales taxes and property taxes (or, if the property is leased, to the property owner and then to the government to whom they pay property taxes), to the companies to the Wal*Mart store pays for utilities and other services, to the Wal*Mart stores employees, and to Wal*Mart's shareholders, and to whoever made the product.
Well, yeah, a few of the above categories include people in China, Korea, Japan, etc.
How about if the government just hires people legally authorized to work in the US to build infrastructure in the US? Seems a lot more productive of public value than handing out vouchers.
That article of faith has little evidence.
This is no more true than say that systems without central economic planning by the government never work; all successful economies feature a wide range of relatively free enterprise to which some regulation applies but where government does not make detailed allocation decisions, and some degree of government direct planning and participation in the economy. And certainly there is evidence that the exact kind and degree of government involvement that is desirable varies by conditions.
Certainly, complete central planning is not desirable, but no one that I am aware of is arguing for that.
Since neither of those events actually occurred, the only thing I can think of that that is an example of is why you shouldn't trust Slashdot headlines as a source of reliable inforamtion (assuming that even the headlines are accurate.)
(Several things related to that have actually happened in the last couple years: the EU decided to phase out incadescent lights by 2012, a California lawmaker proposed a similar rule in California that never passed, GE announced work on high efficiency incandescent (HEI) lights which it said could eventually match CFL efficience, GE abandoned work on the HEI lights to focus on LED lights, which, while currently more expensive than CFLs, are already more efficient.)
If one assumes that all government spending is exactly equal and that the only choice is whether or not the government should spend money rather than whether it should and, if so, how it should, that would make some sense. Though it still fails to consider it against alternatives.
In the real world, it makes even less sense, since there is a real question of how funds are spent, and plenty of reasons to think that, of the spending options available to the government, those that it has chosen are particularly poor.
No, it is based on the fact that, in the real world, creating jobs is a good thing. Neither "magical" nor "wonderful" are relevant.
No, in an ideal world no jobs would be needed, but since such a scenario would not involve scarcity, it would arguably not even have an economy, which is a means by which limited resources are distributed.
Certainly, there is some attraction to such a pure-capital economy (though I wouldn't call it ideal.) But its not the real world, nor is it something realistically attainable in the short term. Consequently, in the short-term, dealing with the actual consequence the actual recession has for actual people, creating jobs is a good things.
Inasmuch as it is possible for people to even begin to approach the kind of life they would have in your proposed pure-capital utopia, they need investable capital -- i.e., money to invest beyond that necessary to spend for self-maintenance. For most people that haven't inherited large sums of money or won the lottery, that means they need a job. So, even if we accept that what you propose is the ideal economy we should be striving for, we need people to have jobs now so that they could have capital to invest in the "machine warehouses" if those ever get built, or in real productive enterprises which actually exist in the interim.
You are presuming that a clean floor has the same value as a dirty floor, which is exactly the same mistake as assuming that a block of gold ore has the same value as the gold it could be refined into which has the same value as, say, the spacesuit helmet visor screen that could be produced from the refined gold.
Also, you have $100, and the person who paid you to clean their floor has a clean floor that used to be a dirty floor; and clearly, the clean floor is worth $100 more than the dirty floor to them, otherwise the exchange wouldn't have taken place.
Wrong. Make a blanket and sell it for $100 and you've turned some quantity of raw materials into $100 of finished product, leaving you with $100, and the person who bought the blanket with a product worth $100 to them. In either case, the person paying you has received something worth $100 to them, and given $100 to you.
If services didn't produce value, no one would pay for them.
Wrong. The US government is borrowing and spending money, not printing it, for all of the bailouts (most of which are really under the umbrella of one bailout, the TARP program.) The Fed, distinct from the government, has also extended some $2+ trillion in additional loans as part of its own bailout contemporaneous with the other bailouts, which is manipulating M1, but is entirely separate from any bailout approved by Congress.
The Fed effort is pretty hard to unravel as to where the money has gone and what effect it has had, but it seems likely to me to be a very bad idea (and it is probably the proximate cause, or at least a major factor, in the collapse of the M1 multiplier.)
Simply repeating that claim does not provide any reason to believe its true. There is no rational reason to expect that the M1 multiplier (which isn't a measure of [a] the stimulative effect of anything, or [b] any effect of government debt or spending) would have any effect on the average stimulative effect of additional government spending.
I'm not anyone like Bernanke or Paulson, and I'm not conceding anything under pressure. Nor I am conceding, or even claiming, that deficit spending is disturbing. What I'm saying is that properly-directed deficit spending has a substantial utility under certain circumstances (including, relevant to the present discussion, responding to a recession), but that that utility is undermined by a high debt:GDP ratio. Consequently, it is generally desirable for government to reduce the debt:GDP ratio during expansions (either by reducing the debt outright or by increasing it at a rate slower than the rate of expansion), and only engage in substantial deficit spending (that is, deficit spending such that the debt:GDP ratio is increased) when it is necessary to respond to an emergency such as a recession.
Nor have I (nor Keynes, to my knowledge) advocated printing money, specifically, to stimulate the economy. What I've advocated is fiscal, not monetary, stimulus, which includes borrowing money (and could conceivably include targetted taxes, though generally that's counterproductive compared to borrowing, as well) to support increased short-term spending. Keynes did encourage both monetary and fiscal stimulus, but not printing money, AFAIK; instead Keynes favored easy money policies such as reduction in interest rates. In my view, the evidence is pretty clear that monetary policy is somewhat useful in smoothing minor economic fluctuations, but its pretty clear that the present crisis has gone beyond what any monetary policy can do much to deal with, at best, monetary policy can avoid making things worse (and I'm not particularly convinced that the Fed is even meeting that bar.)
This is certainly an article of faith in some circles, but there is neither evidence nor even any coherent theory supporting it.
That's both false and not even sensible; the ratio is always calculated using current (i.e., nominal) values for both, and is a unitless value. Nominal vs. real is only a distinction that matters when you are comparing values in $ across different years; since the ratio is a unitless value, not one in $, the issue doesn't arise.
Uh, no.
When the government borrows money, it issues treasury security (e.g., T-bills), which are sold, generally at auction. It pays interest to the holders of those securities. The Federal Reserve does buy some of the securities, so do domestic and foreign private investors and foreign central banks. (Actually, because they are sold at auction, it doesn't pay "interest" in the traditional sense on many securites, it pays the face value of the security at maturity, this may be more than it received for the security, it may be the same or less -- recently, short-term bills have frequently been selling at or near no discount from the face value.)
Actually, plenty of government bills say "$X for Broad General Purpose A" and provides some specified executive agency broad discretion in how to meet that broad general purpose.
This is particular true of bills passed to provide resources to an administration to address an emergency. (This can, of course, have its own problems, particularly if there is no accountability for how the purposes is addressed, as has been argued to be a serious problem with the recent TARP "bank bailout" bill.)
Your entire argument seems to rest on the idea that it is somehow impossible for legislation providing money to address a problem not to be excessively specific as to how the money is going to be spent. This is pretty clearly not the case.
Quite.
Because the government is looking for a different results, one whose risks, if any, are almost completely unrelated to the risks that face private investors in acheiving the results they seek. When the government spends money for stimulus purposes, it is looking to get people working, get them paid, and get them spending money in the short-term. It usually is also looking at getting the job done that those people are being paid to do, for some long-term social benefit. The first of these, which is the most important in terms of economic stimulus, is fairly low risk. The second is often also low risk, though there is some speculative component in any such investment. When a private investor invests, they are looking to get money back on their investment; the social utility of employment and spending, and even the long-term social utility of the thing beings built by the enterprise that is being invested in are not the outcomes being sought by most dollars invested privately. The risk associated with the private goals is completely unrelated to the risk associated with the public goals.
It was, more accurately, the result of maintaining a massive military and security apparatus in an effort to control the world (in, of course, a spending competition with the US) that its economy couldn't sustain indefinitely. It wouldn't have mattered much how the rest of the resource in the economy were directed in the long-term outcome, though the path to failure might have looked a little different.
Which is something the US might keep in mind as its military spending continues to equal or exceed that of the rest of the world combined.
The M1 multiplier (that has fallen below zero) is the ratio of the M1 meaure of money supply to the Adjusted Monetary Base measure. . It is fair to say it is something of a measure of the utility of policies that seek to stimulate the economy by increasing M1 (though even there it is limited, since even the Adjusted Monetary Base measure is just a different measure of money supply, not a measure of economic activity); it has little to do with either the velocity of money (the source of the "multiplier effect" being discussed in this thread, which is not the same thing as the "M1 multiplier" you point to; the "multiplier effect" relates to how often a particular dollar in the money supply is spent, not the ratio between two different measures of the money supply) or the ability of the government to stimulate by borrowing dollars from domestic and foreign holders of dollars and spending it in particular, focussed areas (since such policy does not rely on manipulate M1.)
The author of that piece attempts to confuse the issue by posting a different graph that shows a falling trend in how effective stimulative government deficit spending has been on average recently, and attempting to suggest, without any real reason, that the two graphs are directly related and indeed that the M1 multiplier graph says that the trend shown in the other graph is actually worse than it appears. This is not rational. The second graph does show a long-term problem, and particularly does show why, once this recession ends, the US government must, in the subsequent expansion, begin to pay down the debt or at least stop expanding the debt faster than the GDP during expansions, because if we keep deficit spending through expansions so that the debt:GDP ratio keeps going up, we'll soon reach the point where we can't use deficit spending to stimulate the economy when it is in recession. But, contrary to Denninger's alarmism, the M1 multiplier going below 1 doesn't indicate that the trend in debt utility shown in the second graph is worse than that graph actually shows. They are completely different issues.
Most people don't actually keep all of their money in cash stuffed in a mattress, true. OTOH, there is plenty of subtler hoarding going on.
(1) When banks are perceived as unsafe, people do tend to keep more of their money as cash.
(2) With less economic certainty, depositors are more likely to put funds into demand accounts rather than time deposit accounts; this doesn't seem like "hoarding" at first glance, but because higher reserve requirements apply to demand deposits than time deposits (nonpersonal time deposits in the US impose no reserve requirements on banks!), it is effectively hoarding,
(3) Banks effectively hoard money (actually, reduce the money supply, but the economic effect is exactly identical) simply by not lending out as much money as they could under laws imposing reserve requirements (note that reserve requirements are about 10% of transaction accounts like demand deposits, and 0% of nonpersonal time deposits, so banks have huge leeway in how much money they can lend of what is deposited.) This is, of course, a particularly prominent feature of the present credit crisis.
Actually, the ultra-rich have the lowest mean propensity to spend, and so money in their hands produces, directly, the least economic activity, dollar-per-dollar. They do tend to save/invest a lot, which means they can contribute a lot indirectly to growth. But that depends on how they save and invest. But they make the same kind of shifts in bad economic times that amount to hoarding discussed above. And, even in continuing to invest, right now what is happening is that demand for government debt (perceived as essentially risk free) is going up so much that short-term T-bill rates over the last month actually dipped at least once into negative territory and are hovering around zero: that is, investors are willing to pay as much or more now than they will get at maturity for short-term government debt.
Regardless of the social utility (in terms of job creation, etc.) of private investment overall, the current economic situation has driven the perceived utility to investors of such investment so low that they are desperate to do anything else possible with their money. So to realize the social utility of money pumped into the domestic economy, the government (which exists to realize social utility, not to make direct profits) needs to pump the money in. And because the incentive for private actors to invest in the private sector right now is low, its exceptionally cheap for the government to borrow money to do that right now.
Er, no, its not. Its purely fact. Some uses of money have higher domestic velocity than others. Mercantilism is a particular set of policy preferences, which differ very greatly from what I am proposing.
That's not the idea I'm promoting at all. Promoting, as short-term policy stimulus, policies which focus spending on uses of money which are rationally expected to have a high velocity in the domestic economy, while attempting to derive revenues from sources that would otherwise tend to use money in ways that do not have a high velocity in the domestic economy is not the same as a mercantilist policy of erecting barriers to prevent imports while attempting to promote exports.
Indeed, contrary to mercantilism, you
It might. It might not. It particularly might not when, as is the case right now, deflation occurs, as $1 tomorrow becomes worth more than $1 today, so it makes perfect sense from the perspective of each individual spender to hold cash and defer spending, since cash then has a positive real rate of return.
Not only does hoarding result in money sitting idle, right now there is money outright being destroyed as banks just don't extend credit at all (at least, not in the quantities they have until recently), while they continue to accept deposits and payments on existing debt. Its not like the actual money supply is some fixed number based on the number of pieces of paper currency printed and in circulation; most money exists entirely as notations of account, and while reserve limits and similar regulations limit the amount of some forms of money that can be created, there is nothing that keeps the money supply constant.
Even if this was true (which it is not, even if you refer to the world economy when you say "the economy"), that could still create jobs in as not all spending is equally effective at job creation. This is especially the case if you talk about creating jobs in the US economy, since the economy from which the US government takes money to spend when it borrows money is not exclusively the US economy.
No, it reallocates money. Whether or not it creates more jobs than would otherwise be the case depends on how efficient the use it puts money to is at creating jobs as compared to the uses to which the money would otherwise have been put. This is also true (and even more relevant) if you add "in the US" after each instance of "jobs" in the previous sentence.
Administrative costs create jobs, too; also, spending can create jobs with a greater total salary than the amount of spending, since each dollar can be spent more than once. The stimulative effect in the domestic economy of spending isn't just a product of the amount of money spent, but of the velocity of money in the domestic economy (how many times each dollar is spent in the domestic economy) resulting from that spending.
If every use of money (including taking it in cash and stuffing it in a mattress or lighting it on fire) were equally effective at creating jobs, this argument might be relevant (except that the relevant thing isn't that every penny must be taken from taxpayers now or in the potentially-infinitely-distant future, but that every penny must be taken from some other use right now, whether its in the form of taxation or borrowing from someone who has money and would use it for something else if they weren't lending it to the government.)
Of course, not every use of money is equally effective at creating jobs, and even moreso not every use of money is equally effective at creating jobs within the US economy, so its pretty clear that changing how money is used by either taxing or borrowing money that would be used for one purpose if it were not taxed or borrowed and applying to a different purpose can create more (or less, depending on the uses the money is taken from and the uses it is put to) jobs than would otherwise be the case, and even more certainly the case that doing so can create more jobs in the US economy than would otherwise be the case.