[Topgun]

The defecation has hit the ventilation

^Why are the stupid bonuses getting so much coverage and not this?

And that article fails, they quote some guy that says that it's "uncertain" if printing money causes inflation.
When doesn't it cause inflation?

it's just the first link I could find.
EDIT: I meant bonuses, not bonds.

[Nuclear1]

While the deficit is a problem, it's where the money that's causing the deficit is going that causes more concern. Hence, AIG's bonuses cause outrage.

[Solatar]

Because the bonuses coverage is a distraction from this? I mean...this pisses me off much more than the bonuses.

[Scotty]

they quote some guy that says that it's "uncertain" if printing money causes inflation.

*facepalm*

[Rick James]

Weimar Germany would say otherwise.

EDIT: Obama to the masses: "Chill the f*ck out, America. I got this."

[Mika]

The first time I saw Obama address something. Maybe US is on the right track again.

And I also thought the nationalization and large government funded projects was a good measure to counter recession. Come to think of it, I recall it has been tested in the recent history for a couple of times.

[Scotty]

And I also thought the nationalization and large government funded projects was a good measure to counter recession.

*facepalm*

I recall it has been tested in the recent history for a couple of times.

Also *facepalm*

The New Deal did hardly anything besides paying people to make roads so they weren't unemployed.  It did almost absolutely nothing for our economy.  What got us out of the Depression was WWII, because wartime demand opened the opportunity for 1) many, many, MANY manufacturing jobs and 2) provided jobs (as in the army) for many, many, MANY other people.

[Mika]

I didn't limit the comment to US only.

The New Deal did hardly anything besides paying people to make roads so they weren't unemployed.  It did almost absolutely nothing for our economy.  What got us out of the Depression was WWII, because wartime demand opened the opportunity for 1) many, many, MANY manufacturing jobs and 2) provided jobs (as in the army) for many, many, MANY other people.

I would think this is a contradiction in itself.

Mika

[Scotty]

First: true.  It did work for Venezuela.  As of yet, nowhere else I can think of.

Second:  How so?

The New Deal had people doing mudane things that in hardly any way impacted the country.  It amounted to throwing government money at people who dug holes or cut down trees.  It really did not help that much.

[The E]

And that article fails, they quote some guy that says that it's "uncertain" if printing money causes inflation.
When doesn't it cause inflation?

<sidetrack> When it is done to replace bank notes that have been destroyed? Oh, and of all the Money in circulation, how much is actually printed up/coined?
Little thought experiment here: Someone gives you a Dollar. You decide to bank it. Then you transfer that money electronically to another bank. What happens to the actual dollar note? Hint: It isn't mailed to the bank that the electronic record of the money went to. And no additional value is being created.</sidetrack>

Now, creating opportunities for people to earn money, a la "New Deal", is a valid strategy, as it gives money to people without it being a gift or being derided as some fiendish plot to drive us all into socialism^TM.  Simply printing money, and then handing it out, will increase inflation, which is a bad idea in the current climate, IMHO.

[Mika]

Second:  How so?

The New Deal had people doing mudane things that in hardly any way impacted the country.  It amounted to throwing government money at people who dug holes or cut down trees.  It really did not help that much.

Let's put it this way:

I suppose there has been an actual demand for goods during the New Deal also. It is only that the goods were too expensive that they couldn't be bought. Suddenly, WWII starts. Where did the money suddenly come for all those manufacturing jobs?

The point I'm trying to say is that New Deal and WWII manufacturing jobs are both government incentives, the difference being that the taxes were raised (and people paid because it was war time), and were happy to work for lot less amount of money (because it was war time), resulting in lot more jobs generated.

Mika

[Scotty]

It is only that the goods were too expensive that they couldn't be bought.

Comes from a vicious cycle.  Domestic goods are too expensive abroad, prices are cut, or production is cut back to increase demand and warrant the higher prices.  However, cutting prices = less revenue = less payment to employees.  Conversely, cutting back production = less jobs needed = more unemployment.  Both end up with expensive goods.

The point I'm trying to say is that New Deal and WWII manufacturing jobs are both government incentives

Only sorta.  The New Deal was incentives.  WWII manufacturing jobs are a result of direct government contracts.  Basic economics:  consumer (Gov't in this case) purchases goods from supplier.  Not an incentive.

[Mika]

What is the difference between government handing out the money to construct roads and government handing out the money to construct weapons from the worker's side? He still gets paid, after all.

The only difference is the scale, and it is explainable by people paying more money and being happy with less.

Mika

[ssmit132]

And that article fails, they quote some guy that says that it's "uncertain" if printing money causes inflation.
When doesn't it cause inflation?

Um...

The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services.

So if you print money but also create more goods and services, you shouldn't get too much inflation. I did an assignment on German hyperinflation in Economics last year, so I know how this works.

[SpardaSon21]

But there is no corresponding output in goods and services to go with the government's rapid spending.  All the government is doing is adding money to the economy.  And even if goods and services do go up, I doubt they will go up to the tune of $1,200,000,000,000.  That's a lot of zeros to compensate for.

[ssmit132]

I didn't say that they would be able to counter the printing of $1.2 trillion, I was just countering the statement that Topgun made. Printing money does not always cause inflation, but in this case it probably will.

[Nuclear1]

It did almost absolutely nothing for our economy.  What got us out of the Depression was WWII

You're right to an extent.  The New Deal didn't improve the economy necessarily, but it did keep it from deteriorating any further.  It helped stabilize the stock market and the banking sector in particular, but it wasn't going to be enough to pull the country out of the economic downturn.  Hence, World War II.

[Goober5000]

It did almost absolutely nothing for our economy.  What got us out of the Depression was WWII

You're right to an extent.  The New Deal didn't improve the economy necessarily, but it did keep it from deteriorating any further.  It helped stabilize the stock market and the banking sector in particular, but it wasn't going to be enough to pull the country out of the economic downturn.  Hence, World War II.

Actually, WWII didn't fix the economy by employing people, it fixed the economy because 1) everyone was buying or leasing our weapons; and 2) all the politicians were too distracted by the war to stop breaking the economy.

The New Deal didn't end the Great Depression; it prolonged it.  See this article for example, or ask any Austrian economist.

[blackhole]

What I want to know is what would happen to the people who depend on the companies who have been bailed out if we didn't bail them out. Then again, printing more money seems like a bad idea. But so does having $10 trillion dollars in debt. 

Nothing involving economics is ever simple. It's why people get PhD's studying this stuff and still have no idea what to do. Chances are, if someone who hasn't gone to college for 8 years thinks they know how to fix the economy, they aren't taking into account all of the variables.

[Mika]

Actually, WWII didn't fix the economy by employing people, it fixed the economy because 1) everyone was buying or leasing our weapons; and 2) all the politicians were too distracted by the war to stop breaking the economy.

The New Deal didn't end the Great Depression; it prolonged it.  See this article for example, or ask any Austrian economist.

There is a difference in the nuances, I read the article so that the problem was not actually the idea that government should intervene, but the way it did it by increasing the wages.

And also, this doesn't explain where the money came from to buy those weapons in the first place!

Nothing involving economics is ever simple. It's why people get PhD's studying this stuff and still have no idea what to do. Chances are, if someone who hasn't gone to college for 8 years thinks they know how to fix the economy, they aren't taking into account all of the variables.

Why would it be so complex? The way I see it is that the University is simply making the economics complex. While I'm certainly not educated in economics, I know a bunch of people who are and they don't make it that complex. [This is actually a more general problem in the Universities, all faculties are guilty of this.]

Mika