Historical Economic Grace Period?
 

I have a simple question: Historically, how long does it take for a President/Congress' actions to show up in the economy?
Clearly, the current economy lays at Bush and the last Congress' feet. So, legitimately, at what point does the situation fully rest on Pres. Obama, and this Congresses feet?

I believe it would take a minimum of 4 months to judge initial results, and by 1 year, it would be 80-90% of the current crews choices. Does anyone else have an opinion, or economic data to let me know. Thanks

Re: Historical Economic Grace Period?
 

[quote=CRedskinsRule;525319]I have a simple question: Historically, how long does it take for a President/Congress' actions to show up in the economy?
Clearly, the current economy lays at Bush and the last Congress' feet. So, legitimately, at what point does the situation fully rest on Pres. Obama, and this Congresses feet?

I believe it would take a minimum of 4 months to judge initial results, and by 1 year, it would be 80-90% of the current crews choices. Does anyone else have an opinion, or economic data to let me know. Thanks[/quote]

It's a major fallacy to think the President of the United States can have a significant impact on the economy in the first place.

There are things they can do, but prevent a recession, or pull us out of one? Impossible. Most of the economy is way out of the government's hands.

The most impact you can expect from lawmakers is to provide the stimulus to shorten the length of a recession. When it takes effect? [B]Very[/B] hard to say. Most top economists think with a stimulus package the economy will bounce back in 2010.

But it would eventually bounce back even without a stimulus. It just might take longer.

Re: Historical Economic Grace Period?
 

It depends on the severity of the problem. Four months? Four months can't fix Iceland or Zimbabwe not that we're in the same boat. The right question to ask is should we take action(s) or shouldn't we take action(s), if we take action(s) which action(s) will lead to faster economic recovery. The [URL="http://en.wikipedia.org/wiki/Austrian_Economics"]Austrian[/URL], the [URL="http://en.wikipedia.org/wiki/New_Keynesian_economics"]New Keynesian,[/URL] the [URL="http://en.wikipedia.org/wiki/Monetarism"]Monetarism[/URL], or all of the above approach?

Re: Historical Economic Grace Period?
 

[quote=saden1;525348]It depends on the severity of the problem. Four months? Four months can't fix Iceland or Zimbabwe not that we're in the same boat. The right question to ask is should we take action(s) or shouldn't we take action(s), if we take action(s) which action(s) will lead to faster economic recovery. [B]The [URL="http://en.wikipedia.org/wiki/Austrian_Economics"]Austrian[/URL] or the [URL="http://en.wikipedia.org/wiki/New_Keynesian_economics"]New Keynesian[/URL] approach?[/B][/quote]

Interesting links, however it's certainly not that black or white. I'd say the answer should fall somewhere in the middle, however the current proposal falls closer to New Keynesian approach than Austrian. You've got to have oversight of course, but I fear Obama's proposed package is overcompensation for the past several years.

Re: Historical Economic Grace Period?
 

[quote=saden1;525348]It depends on the severity of the problem. Four months? Four months can't fix Iceland or Zimbabwe not that we're in the same boat. The right question to ask is should we take action(s) or shouldn't we take action(s), if we take action(s) which action(s) will lead to faster economic recovery. The [URL="http://en.wikipedia.org/wiki/Austrian_Economics"]Austrian[/URL] or the [URL="http://en.wikipedia.org/wiki/New_Keynesian_economics"]New Keynesian[/URL] approach?[/quote]

Austrian, we've already been doing Keynesian.

Re: Historical Economic Grace Period?
 

[quote=saden1;525348]It depends on the severity of the problem. [B]Four months?[/B] Four months can't fix Iceland or Zimbabwe not that we're in the same boat. The right question to ask is should we take action(s) or shouldn't we take action(s), if we take action(s) which action(s) will lead to faster economic recovery. The [URL="http://en.wikipedia.org/wiki/Austrian_Economics"]Austrian[/URL], the [URL="http://en.wikipedia.org/wiki/New_Keynesian_economics"]New Keynesian,[/URL] the [URL="http://en.wikipedia.org/wiki/Monetarism"]Monetarism[/URL], or all of the above approach?[/quote]

I didn't say 4 months would fix it, I specifically said "to see initial results"

Re: Historical Economic Grace Period?
 

[quote=Schneed10;525343][B]It's a major fallacy to think the President of the United States can have a significant impact on the economy in the first place[/B].

There are things they can do, but prevent a recession, or pull us out of one? Impossible. Most of the economy is way out of the government's hands.

The most impact you can expect from lawmakers is to provide the stimulus to shorten the length of a recession. When it takes effect? [B]Very[/B] hard to say. Most top economists think with a stimulus package the economy will bounce back in 2010.

But it would eventually bounce back even without a stimulus. It just might take longer.[/quote]

I specifically said President/Congress- obviously the economy is cyclical and the government's actions simply "buffer" it in some ways. I was really wondering more about HISTORICAL results, then opening another round of "Obama speak". That was already going on in a different thread, or 2 or 3.

Re: Historical Economic Grace Period?
 

[quote=CRedskinsRule;525401]I specifically said President/Congress- obviously the economy is cyclical and the government's actions simply "buffer" it in some ways. I was really wondering more about HISTORICAL results, then opening another round of "Obama speak". That was already going on in a different thread, or 2 or 3.[/quote]

I have no idea what you're talking about and it seems you have misunderstood me.

The opening post in this thread seemed to indicate that you were placing blame for the current economy at the feet of Bush and the congress of 2000-2008. And that you were looking for a time period at which you could begin passing judgment on Obama.

My response was neither against nor in defense of President Obama. I'm merely pointing out that one cannot expect the government to have a significant impact on the economy. That IS the historical result. Economies bounce back not because of the actions of their government, but because of innovation by the people, the cyclical nature of business, and the relative health of other economies around the world.

It is the Federal Reserve that has the greatest impact on the economy. But even they have relative little recourse to drive the economy where they wish it to go.

Re: Historical Economic Grace Period?
 

[quote=Schneed10;525407]I have no idea what you're talking about and it seems you have misunderstood me.

The opening post in this thread seemed to indicate that you were placing blame for the current economy at the feet of Bush and the congress of 2000-2008. And that you were looking for a time period at which you could begin passing judgment on Obama.

My response was neither against nor in defense of President Obama. I'm merely pointing out that one cannot expect the government to have a significant impact on the economy. That IS the historical result. Economies bounce back not because of the actions of their government, but because of innovation by the people, the cyclical nature of business, and the relative health of other economies around the world.

It is the Federal Reserve that has the greatest impact on the economy. But even they have relative little recourse to drive the economy where they wish it to go.[/quote]

Fair enough. I guess I think government policy has definite impact, be it activist or laissez-faire(which i prefer). And also that in American History we might be able to see some trends from when Presidents and Congress transitions.

Re: Historical Economic Grace Period?
 

[quote=CRedskinsRule;525319]I have a simple question: Historically, how long does it take for a President/Congress' actions to show up in the economy?
Clearly, the current economy lays at Bush and the last Congress' feet. So, legitimately, at what point does the situation fully rest on Pres. Obama, and this Congresses feet?

I believe it would take a minimum of 4 months to judge initial results, and by 1 year, it would be 80-90% of the current crews choices. Does anyone else have an opinion, or economic data to let me know. Thanks[/quote]

I could blame Bush and congress if this was just a US slump but its world wide so its hard to blame one person. The economy will come back with or without the stimulas its rather or not it speeds up the recovery.

Re: Historical Economic Grace Period?
 

[quote=firstdown;525421]I could blame Bush and congress if this was just a US slump but its world wide so its hard to blame one person. The economy will come back with or without the stimulas its rather or not it speeds up the recovery.[/quote]

Agreed.

There could have been more oversight on the mortgage mess, there could have been more oversight on corporate greed, and stuff like that. But it never would have prevented the recession. In fact, if there were tough oversight of mortgage lending, there never would have been the strong GDP growth we saw prior to the recession.

With oversight, we would have experienced slower growth and a softer recession. Without it, we experienced faster growth and a harder recession. In the end, roughly the same number of people would have been out of work for roughly the same amount of time.

Now with a stimulus, we can dig ourselves out sooner but the economy won't bounce back as high. Without a stimulus, it will take longer to dig out, but growth will bounce back higher when we do eventually pull out.

Policy can affect the severity of ebbs and flows, but it can't change the unemployment x time quotient, and it can't change the GDP growth over time.

Re: Historical Economic Grace Period?
 

Four months to see results? What kind of results do you expect to see in 4 months? The unemployment number go down? Consumer confidence index to rise? And what if you don't? [URL="http://scottthong.files.wordpress.com/2008/04/obamaphone.jpg"]Obama FAIL[/URL]?

Re: Historical Economic Grace Period?
 

[quote=Schneed10;525428]Agreed.

There could have been more oversight on the mortgage mess, there could have been more oversight on corporate greed, and stuff like that. But it never would have prevented the recession. In fact, if there were tough oversight of mortgage lending, there never would have been the strong GDP growth we saw prior to the recession.

With oversight, we would have experienced slower growth and a softer recession. Without it, we experienced faster growth and a harder recession. In the end, roughly the same number of people would have been out of work for roughly the same amount of time.

Now with a stimulus, we can dig ourselves out sooner but the economy won't bounce back as high. Without a stimulus, it will take longer to dig out, but growth will bounce back higher when we do eventually pull out.

Policy can affect the severity of ebbs and flows, but it can't change the unemployment x time quotient, and it can't change the GDP growth over time.[/quote]
Most of the bills spending on roads and such that may add jobs will not hit for over a year. The main things that will hit this year is tax cuts and aid to the states which I don't think are enough to do very much good. So if the economy is starting to grow in a year are they still going to spend another 400 to 500 billion? I'm sure they will.[url=http://www.businessweek.com/ap/financialnews/D95QSQSO0.htm]Much in Obama stimulus bill won't hit economy soon - BusinessWeek[/url]

Re: Historical Economic Grace Period?
 

Yes, those are two good examples. At 4 months, I don't think it would be about Obama, as much as the whether the stimulus is having the desired effect.

Re: Historical Economic Grace Period?
 

I understand people are having problems but that does not mean that we should rush to pass a bill spending close to 1 trillion dollars. I think Obama and congress need to step back and take a longer look to what is really needed. The state and cities in my area are rushing in ready to pounce on every penny they can get from this bill. So much more of our money is going to get waisted.

Re: Historical Economic Grace Period?
 

[URL="http://www.thewarpath.net/parking-lot/598,000 jobs off of U.S. payrolls in January, taking the unemployment rate up to 7.6%,"]No Rush[/URL]:

[quote] Employers slashed another 598,000 jobs off of U.S. payrolls in January, taking the unemployment rate up to 7.6%, according to the latest government reading on the nation's battered labor market.

The latest job loss is the worst since December 1974, and brings job losses to 1.8 million in just the last three months. It is worse than the forecast of a loss of 540,000 jobs from economists surveyed by Briefing.com

The rise in the unemployment rate was worse than the 7.5% rate economists expected. The unemployment rate is now at its highest level since September, 1992.[/quote]

Re: Historical Economic Grace Period?
 

[quote=saden1;525470][URL="http://www.thewarpath.net/parking-lot/598,000 jobs off of U.S. payrolls in January, taking the unemployment rate up to 7.6%,"]No Rush[/URL]:[/quote]
Yea but a poor bill thats just rushed through so congress can say they did something will not stop that trend. Thats why I say they should not try to rush this through.

Re: Historical Economic Grace Period?
 

[quote=saden1;525470][URL="http://www.thewarpath.net/parking-lot/598,000 jobs off of U.S. payrolls in January, taking the unemployment rate up to 7.6%,"]No Rush[/URL]:[/quote]

I'm not going to live in fear that the sky will fall. They'll pass that stinking bill one way or the other. Have you heard about all of the things that are in it? It is the biggest porker since that lady who got stuck on the toilet.

Re: Historical Economic Grace Period?
 

I'll let the president speak for himself.

[yt]EJDwbfbpRnQ[/yt]

Re: Historical Economic Grace Period?
 

[quote=Trample the Elderly;525482]I'm not going to live in fear that the sky will fall. They'll pass that stinking bill one way or the other. Have you heard about all of the things that are in it? It is the biggest porker since that lady who got stuck on the toilet.[/quote]
Her are a few porkers:
[B]Pork Spending[/B]: Digital TV Coupons ($650 Million), Gov’t Cars ($600 Million), Nat’l Endowment for the Arts ($50 Million), Repairs to National Mall ($200 Million, including $21m for sod).

Re: Historical Economic Grace Period?
 

[quote=firstdown;525508]Her are a few porkers:
[B]Pork Spending[/B]: Digital TV Coupons ($650 Million), Gov’t Cars ($600 Million), Nat’l Endowment for the Arts ($50 Million), Repairs to National Mall ($200 Million, [B]including $21m for sod[/B]).[/quote]

At least the grass will be greener!!!

Re: Historical Economic Grace Period?
 

[quote=CRedskinsRule;525524]At least the grass will be greener!!![/quote]

For 21 million it should never need water and cuts itself.

Re: Historical Economic Grace Period?
 

[quote=firstdown;525508]Her are a few porkers:
[B]Pork Spending[/B]: Digital TV Coupons ($650 Million), Gov’t Cars ($600 Million), Nat’l Endowment for the Arts ($50 Million), Repairs to National Mall ($200 Million, including $21m for sod).[/quote]


In a time of recession the government buying fuel efficient cars which save the government money in the long run from ailing car companies receiving bailout funds is a good thing. Two birds with one stone! Big revelation, are you ready for it? 66% of the stimulus bill is pork!


Is it just me or is economics really counter intuitive?

Re: Historical Economic Grace Period?
 

[quote=saden1;525533]In a time of recession the government buying fuel efficient cars which save the government money in the long run from ailing car companies receiving bailout funds is a good thing. Two birds with one stone! Big revelation, are you ready for it? 66% of the stimulus bill is pork!


Is it just me or is economics really counter intuitive?[/quote]

That I might buy if its done on like replace the older cars first and do it as needed instead of all at once. Hey, Saden have a good weekend.

Re: Historical Economic Grace Period?
 

[quote=firstdown;525526]For 21 million it should never need water and cuts itself.[/quote]

And I better not hear ONE police officer EVER yell at me for letting my kids play on the grass!

Re: Historical Economic Grace Period?
 

[quote=firstdown;525538]That I might buy if its done on like replace the older cars first and do it as needed instead of all at once. Hey, Saden have a good weekend.[/quote]

I hope they're spending the money wisely and efficiently. Like my old man says though, never gleefully perform self-amputation before consulting a doctor.

Thanks man, have a good weekend too.

Re: Historical Economic Grace Period?
 

[URL="http://www.msnbc.msn.com/id/29050187"][COLOR=#07519a]Tentative deal reached on stimulus[/COLOR][/URL]
i guess this is where it starts?

Re: Historical Economic Grace Period?
 

[quote=dmek25;525576][URL="http://www.msnbc.msn.com/id/29050187"][COLOR=#07519a]Tentative deal reached on stimulus[/COLOR][/URL]
i guess this is where it starts?[/quote]
Yea starts to go wrong. I hope its me who is totaly wrong on this but I just don't see this doing that much good.

Re: Historical Economic Grace Period?
 

[quote=firstdown;525974]Yea starts to go wrong. I hope its me who is totaly wrong on this but [B]I just don't see this doing that much good.[/B][/quote]

If you're going to go with that statement then I'm going to go with "I don't see it doing much bad compared to doing nothing....so we do something."

Re: Historical Economic Grace Period?
 

[quote=saden1;525987]If you're going to go with that statement then I'm going to go with "I don't see it doing much bad compared to doing nothing....so we do something."[/quote]

Well if it fails then it is failing to the tune of around 850 billion so it can do bad. I'm not saying do nothing I just don't think you sit down and decide to spend that kind of money with a bill they are rushing through. Obama even said tonight this is just the first step so how much money is this going to cost and what are the other steps.

Re: Historical Economic Grace Period?
 

[quote=firstdown;526016]Well if it fails then it is failing to the tune of around 850 billion so it can do bad. I'm not saying do nothing I just don't think you sit down and decide to spend that kind of money with a bill they are rushing through. Obama even said tonight this is just the first step so how much money is this going to cost and what are the other steps.[/quote]

This is real bad and most estimates put the final bill at 2 trillion to get out of this mess. The problem isn't what's the rush but how to best fix the economy. I mean honestly, since when did the GOP give a shit about what the rush is? Certainly not when Bush was the president -- I hope you're with me at least on this point. I don't mind an intellectually and factually based objections but objection in favor of 100% tax cut is completely irresponsible. I find the whole "let them go out of business" mentality and the games being played disturbing. It is unbecoming.


If we do nothing we will bleed to death as indicated by this graph. If we lose more jobs it means we have less people paying taxes, more people seeking unemployment and free food, less people buy stuff, companies have less revenue....rinse and repeat.


[IMG]http://img.skitch.com/20090209-pkgam89m1f8sm71rtic1e6i1aj.render.png[/IMG]

Re: Historical Economic Grace Period?
 

First off the GOP plan was not just tax cuts as explained here on CNN. Second if you look at the first phase of spending in this bill it more about big goverment then creating jobs. Just a small % goes to roads and building stuff. I would go into more detail but I'm pretty busy at work right now. Hey, maybe his plan is already working.

Her is some of the spending and education will not stimulate the ecomomy and thing like that should have their own bill and not part of a stimulas bill.

Much of the $550 billion in spending is divided among these areas: $142 billion for education, $111 billion for health care, $90 billion for infrastructure, $72 billion for aid and benefits, $54 billion for energy, $16 billion for science and technology and $13 billion for housing.
[url=http://www.cnn.com/2009/POLITICS/02/02/stimulus/index.html]GOP senators draft stimulus alternative - CNN.com[/url]

Re: Historical Economic Grace Period?
 

I appreciate Sen. Martinez's effort to craft a "better" bill, it is certainly better than the original amendment introduced by Jim DeMint that got the support of 36 other GOP Senators. That bill was 100% tax cut. The link your provided states just as much:

[quote] The draft Martinez put together is a broader approach than what some GOP leaders have suggested.

Senate Minority Leader Mitch McConnell and other Republicans appear to want to limit the stimulus to tax cuts and addressing the housing crisis. [/quote]Building and updating schools is wasteful? Having teachers with jobs is wasteful? Buying school supplies? Having students have enough money to go to school? Paying tech companies to modernize the health care system is wasteful? Helping states stay solvent and viable is wasteful? Most states are running out of money for unemployment in the months to come!

I think I've beat this horse dead.

Re: Historical Economic Grace Period?
 

Doesn't look like wall street liked his speech last night either.

Re: Historical Economic Grace Period?
 

[quote=firstdown;526137]Doesn't look like wall street liked his speech last night either. [/quote]
from [URL="http://www.nytimes.com/2009/02/09/us/politics/09text-obama.html?pagewanted=11&_r=1"]http://www.nytimes.com/2009/02/09/us/politics/09text-obama.html?pagewanted=11&_r=1[/URL]
[quote]PRES. OBAMA: Again, Helene, I -- I -- and I'm trying to avoid preempting my secretary of the Treasury; I want all of you to show up at his press conference as well. (Laughter.) He's going to be terrific. [/quote]

doesn't seem like he was that terrific :(
[url=http://news.yahoo.com/s/ap/20090210/ap_on_bi_st_ma_re/wall_street]Stocks tumble after gov't unveils financial plan - Yahoo! News[/url]

Re: Historical Economic Grace Period?
 

[quote=saden1;526071]I appreciate Sen. Martinez's effort to craft a "better" bill, it is certainly better than the original amendment introduced by Jim DeMint that got the support of 36 other GOP Senators. That bill was 100% tax cut. The link your provided states just as much:

Building and updating schools is wasteful? Having teachers with jobs is wasteful? Buying school supplies? Having students have enough money to go to school? Paying tech companies to modernize the health care system is wasteful? Helping states stay solvent and viable is wasteful? Most states are running out of money for unemployment in the months to come!

I think I've beat this horse dead.[/quote]
It doesn't matter if you think its wasteful or not, it isn't stimulus. Massive government spending does not help the economy. It didn't work during the depression and it hasn't worked since (like when Japan tried it in the '90s). The government can't just keep putting trillions into the economy. Its going to cause massive inflation in the future.

This bill is not stimulus at all, it is just a bunch of new government programs and shit that the democrats have been wanting to pass for years.

There are going to be more "stimulus" bills and bailouts too. Obama said the FDR didn't spend enough money during the depression to help the economy. All of this is only going to cause more problems.

I have so much more I want to say but I don't have time now.

Re: Historical Economic Grace Period?
 

I sense great fear in you. Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering. Also, there's an old saying Tennessee, I know it's in Texas, that goes something like "never argue with a fool, on lookers from a distance may not be able to tell the difference."

Resistance is futile. Comrade, you will be assimilated!

p.s. I hope all of this makes sense. If not search your feelings.

Re: Historical Economic Grace Period?
 

[quote=CRedskinsRule;526145]from [URL="http://www.nytimes.com/2009/02/09/us/politics/09text-obama.html?pagewanted=11&_r=1"]http://www.nytimes.com/2009/02/09/us/politics/09text-obama.html?pagewanted=11&_r=1[/URL]


doesn't seem like he was that terrific :(
[url=http://news.yahoo.com/s/ap/20090210/ap_on_bi_st_ma_re/wall_street]Stocks tumble after gov't unveils financial plan - Yahoo! News[/url][/quote]

Your trying to tell me that just because of a speech it made the stocks tumble? The stocks have been tumbling! For a whole freakin year now! Crud! Maybe Obama should just go out there and say.....................................NOTHING! Then we can all watch the stocks tumble for another day! And then blame [I]Clinton[/I] for it! :spank:

Re: Historical Economic Grace Period?
 

Read the article, the stock market does in fact respond to government officials words, and it had risen on expectations of hearing a solid plan, but did not get it.
I am really all for the government doing nothing, that alone would be a savings of 800MILLION dollars. I think the graphs that Saden used earlier point out a telling fact, the economy [B]will[/B] recover. (I know its hard to think that anything can happen without the government sticking its nose into it, and I know that the concept of no government stimulus plan will never take hold - I am just stating my opinion)