Also... your using the $1.40 multiplier without actually any basis or knowledge on the rest of the theory... or the guy who discovered it.


Robert J. Barro estimated that government spending has a short-term multiplier of around 0.4-0.6, meaning for every $1.00 of government spending, overall GDP increases by $0.40-$0.60 GDP. In addition, the spending must be repaid in the future most likely with tax increases which he assumes to have a multiplier of -1.1. This results in a further decrease in GDP and concludes that government spending actually has more cost than benefit.

So government increases spending, making a $.40 for ever buck it puts in. ($1.40, because where it took away $1 dollar.  There is now 1.40)

And raises taxes... costing $1.10 in growth for every buck it takes out.  (so really, costing $2.10)

Taking the whole thing into picture, using the study you were citing.  For every dollar taken in taxes.  The economy shrinks by 70 cents.

The multiplier didn't take into account paying for the spending.

So I wouldn't keep using that number if I were you.  It actually hurts your arugement.  People who make an arguement for more spending based on that number are generally people who "Can't see the otherside of the arguement" and are misquoting statistics to try and make there position look good.

Or people who haven't done there due diligence in research.

Forgive me, but how can I even have a rational conversation with you if you don't even understand the difference between productive and non-productive effort?

Who "puts people to work"?  The government?  The only thing the government can do is tax someone else and use the money they took from that person in order to pay you.

Thank you all so much fot explaining to me how my point of filling and digging holes is nonproductive. Oh wait that was not my point, but still all of you should deserve commendation for retorting points that werent brought up, should i have decided to use those points in my misguided assessment.
Back to me original point which was in response to ssrrylic which squirrel responded to, i said that those jobs which build roads communications safety appearance land value infrastructure as well as government funded programs like energy department program which provided support to companies like ford, are jobs equally as productive and beneficial to a company as the person doing inventory.
That then started a lot of confusion which ill admit is my fault fir saying digging holes and filling them is productive to the company. Oh wait again. No i have to remind myself that i wasnt saying that. Its so easy for me to get confused.

I later, on a separate point said that welfare does help companies in selling products. 70% of people pay less than 1% in order to added tens of thousands of new financial revenue streams. That couple bucks i spent helping someone to spend hundreds improves their neighborhood income and welfare helps develop areas surrounding cities (known fact that welfare havens become yuppie residential areas after the area has developed sufficiently) and helps me live peacefully knowing that someone isnt going to mug me because they cant afford milk. This point i will agree there is contention with. Your desires and benefots do not necessarily equate to mine. So while im for welfare i can inderstand if youre against it.


On yet a separate issue, i said that green energy is helpful because its a long term goal and plan. Long term we need an oil solution. Sure one day the market on its own is going to regulate it all on its own, but at what cost will it be?

I see benefit in getting ahead of the curve of the industry so that we might become more of a leader in it for instruction and manufacturing etc regarding green tech. That may cost us more now, but it appears to me that its only a little bit from everyone whereas in the future it would be disproportionately the rich able to afford the tech and the middle class and poor paying more per week, as is commonly the way to extract their money. The rich buy the farm for 100,000 and the poor buy the produce for 100 every week of their lives.
Again you can contest this point if you choose but in my opinion im never going to be a rich man but likely an upper middle class man, and i dont like the anticipation of understanding thar regardless of what i make i will be typically nickle and dimed by a lack of foresight.
The market to me is an endless series of short term planning. Oil goes up people buy oil. As it goes up and up and up, sure there will eventually be a solutiin but it will be too new since we havent invested, rich will be able to afford and ill end up having to pay more and more and more as oil goes up and up. I trust im making a clear point here.

Kasz you also never answered my question as to what kind of critical thinking im supposed to employ when romney said the federal mandate could completely work on a national level, despite what he may have said after realizing he was going to be a political candidate. Thanks in advance.

Reading comprehension?

What he said then, and what he said now does not contradict with each other.

It's possible for there to be multiple ways to handle a situation.

Well... that and he never actually said that.

http://www.washingtonpost.com/blogs/fact-checker/post/mitt-romney-and-the-individual-mandate-a-highly-misleading-dnc-ad/2012/03/11/gIQATACV6R_blog.html

No offense, but please do some fact checking.  So i suppose really, the real critical thinking you should be using... it to not believe everything the DNC tells you in an attack add.. an instead, spend a good 5 minutes googling the full context, or at least... find a fact check website.   It's what I did before posting in here about what Obama said.

You haven't commented on it... so did you catch the post that showed the full citation of research of the only citation you were using for your point that Government helps GDP.  (IE that in fact, according to the research you cited government spending HURTS GDP when paid for.)

Also... Green Energy Subsidies don't increase technological advances in green energy. If anything they provide a huge incentive to NOT research.

I mean... Say your green energy costs $3.00 more on average then regular energy.

So you get a $3.00 Subsidy.

Why research further? I mean... lets say you dump billions of dollars into research so that your green energy no is only $1.50 more expensive on average.

What's going to happen? That government subsidy is probably going to be rolled back to $1.50. So you've spend billions... for nothing.

Why not just keep the status quo and collect the money?

Now you want a real incentive to create green energy products?   Pass a bill saying you plan to turn the US Military into using 15% Renewable energies and just repalce the same spending your doing on the military anyway.

Nice net neutral way to kill two birds with one stone.

Companies would  be KILLING themselves  researching for that kind of contract.

No, your argument was that the government employs people and these people buy products but this is only a benefit to the economy if these people produce value to taxpayers that is equal (or greater than) the value of the goods and services they would have otherwise bought. In the case of building certain kinds of infastructure, or providing essential services, this may be the case; but it is not generally true.

When it comes to departments or agencies providing "support" to companies, more often than not the benefit of this "support" is that it counteracts the harm that other departments or agencies are doing to these companies.

Suppose you had an additional $5000 per year, what would you spend that money on?

If you're like most people you would probably buy some additional goods, pay for some services, pay down some debt and/or invest this money; in other words you wouldn't just start filling a pool with money so that you could one day swim in it like Scrooge McDuck. This money would then be put in the economy and create jobs producing those goods or providing those services, or the money would be used to invest in companies that would create other jobs.

The money that is currently being spent on welfare would result in a similar number of jobs if it was not taken from the economy in the first place. So the "investment" in these communities would be made regardless, except it would be as a result of people working and providing something in return for the money they recieve.

On the topic of welfare communities ...

Most of the studies I have seen about subsdized housing indicate that it lowers the value of home and increases crime in the area; and I have never seen an indication of it becomming a trendy community until after the housing projects are knocked down.

"Green" energy firms can be split into two distinct groups ...

Companies like GE that will invest in green energy regardless of government action, and use government subsidies to pay their executivies massive bonuses; and companies like Solyndra who sell magic beans to the government and use government subsidies to pay their executivies large bonuses until the companies go out of business. In no way does government intervention lead to an increase in green energy research.

1st bold, yes it was my point. Perhaps it was too vague for someone with no intention on understanding could read, but it was meant that on top of those services, they are employed, hence why the likening to the inventory manager is such a perfect metaphor. You who do not care to see my point, don't see it.

2nd bold, I spend maybe 2 bucks a week on welfare if that. That money would likely go to buying a single ride on the train, or a pack of gum, or a soda. Instead, when it gets lumped into welfare, that 2 dollars becomes a 90$ pair of shoes for someone else, or a 300$ tv. My 2 dollars cannot support industries with products at a higher level than 2$, so, for example:

Everyone makes and has bills exactly due to what they make +2 dollars, welfare does not exist. The entire market of products above 2$ price tag is destroyed.

Same scenario, with welfare, suddenly 20-30% of the population can afford goods up to say 100$. This expands the market vertically to create premium products.

You'll notice that this scenario is basically what the normal economy looks like, poor and middle making just enough, rich support the niche market. With welfare, the size of the market grows since I cannot do anything with 2$ to support an industry that sells 500$ items. I can save up 50 a week for ten weeks, but that 2$ per week won't even affect how many weeks it takes to get 500$. Again, it lets me buy a pack of gum when it's in my pocket, it lets others buy bigger purchases. Again, this is roughly how republicans think of the rich, give the rich more of a break (instead of welfare to the poor), and they will support the market by purchasing goods. The difference is that instead of giving the extra to the rich, we're giving it to a different class, who likely buys different items.

Sure I can see the problems of green subsidies, but seriously what are you going to do without subsidy? I know it sucks but who's going to work on it? I don't think everyone is in the industry to weasel the government, that seems a bit conspiratorial. Kids don't dream of going to the olympics so that they can get a chunk of gold and merchandising, the same with companies in green energy. Sure maybe some companies do the wrong thing and abuse the system (of course it's impossible to regulate that nowadays, thanks GOP), but there are some that don't. It isn't a bad system because bad people abuse the system, it's a bad system because those bad people pay bad people in congress to prevent action to be taken.

What happens to that $2 (and for that matter a bunch of other 2 dollars from other people) once you've bought the gum?

The answer is... it gets bundled together... just how you'd have government do.   The difference is... the company gives you gum.  Governmet gives you nothing.   GDP grows, because gum has been produced and you purchased it.

This is partially why the study you unknowingly cited, comes to the conclusion that government spending in general (not just welfare) is bound to cause a loss in GDP growth.

but it does build something, it builds economy in poorer areas, keeps people in poorer areas content and buying more infrastructure, like satellite dishes. It gives companies a reason to branch into those areas because they become affordable. It grows small businesses in that area, which leads to new development projects and new buildings and when offering greater diversity of businesses, it attracts developers. Many of these poor areas are in havens near cities. As the wealth of that area grows, younger professionals and entry level people start renting in the area. Eventually these poor areas become yuppie developments. Growing up poor I've seen it happen firsthand in several townships around boston, like Everett, Malden, East Boston, Jamaica Plain, The back bay. These were all once just poor neighborhoods and as spending in the area increased, which was unlikely to occur for people living out of town and not crossing the tracks so to speak. That's my opinion of it anyway.

So yes, while the gum would send money to people owning the business and working there, it instead tends to support people who don't live or spend in these areas. As area develops, it expands the city. More and more developers and businesses are willing to expand into these areas, set up new buildings, etc. A good example is new york city's greenwich village, and someday soon, the bronx.

More people in and with access to the city and businesses means more businesses can support their infrastructure with workers. It cuts down on travel and commuting, saving traffic and road maintenance, etc.

Sure it's debateable, I'll agree that perhaps there is a net loss (haven't got the full picture yet), but I don't either see it as simply a waste of resources to provide people the ability to buy products freely.

I have a few problems with this.

Firstly, you don't seem to understand what infrastructure is.

Secondly, generally when urban renewel projects happen what happens is the poor get pushed out.  Not Uplifted.

Thirdly, the areas you talked about aren't areas that were lifted up through welfare.

You seem to be conflating Infrastructure spending, Welfare spending and Urban Renewal as if they were the same thing in an attempt to make them look all Pro and no Con.

There are a few big issues

1) When people talk about infrastructure they don't mean sattelite dishes.  They usually mean big stuff like phone lines, dams, stuff like that.

2) In general actually Urban Renewel has lately been one of the biggest problems with cities.   Largely because they tend to target older poorer neighberhoods that actually tend to have the kind of buildings that companies looking back to migrate to the city might use.  They actually just had a really great guest talking about this on NPR yesterday.

In general, having a private company moving into your poor area is the best way for urban renewel because your not likely to be pushed out of your homes, because your homes are still poor, and not going to be bulldozed for new buildings.

3) Welfare spending... as in, giving people money and stuff because they're poor hurts the economy.  That's fine though.  I don't know why people try and make up numbers to try and fake and pretend it helps the economy.  As far as I know the point of welfare is to help people.  Why people try and pretend its something else i'll never get.