G-20 Ministers Aim for More Job Growth

[alp227]

Source: New York Times

MOSCOW — The top financial officials of the world’s largest economies issued a joint statement on Saturday endorsing continued government spending to prime the global economy for a full recovery.

“Growth and creating jobs remains our priority,” the statement from the finance ministers and central bank governors of the Group of 20 countries said.

It added that the governments in the organization, which collectively represent about 90 percent of the world’s economic activity, “are fully committed to taking decisive actions to return to a robust, job-rich growth path.”

Previous communiqués issued after such meetings had also indicated policy support among some member governments to focus on balancing budgets, not just spending to get out of recession. In this light, Saturday’s statement suggested the weight of policy consensus in large governments was shifting toward continued stimulus.

Read more: http://www.nytimes.com/2013/07/21/business/global/g-20-ministers-aim-for-more-job-growth.html

[quadrature]

1. same tired cliche. nt

[jtuck004]

2. Weeelll, we are paying $85 billion a month in hard-earned taxpayer dollars to the bankers whose

criminal enterprise trashed our economy and ruined the lives of tens of millions of people. They reported a $20 billion profit in the second quarter of this year, so they have some damn fine jobs. Heck, people like Mi$$ RobME and the morons that are fans of his will even try to tell you that it's actually helping someone else. 'Course, the banks are winding up with all the money...

Regardless of those who try to shove the idea down their throats, however, it ain't doin' shit for at least a hundred million of our neighbors. Here's a picture of about half of them.



Here:

But maybe those "top financial officials" meant invest it in your country and people instead of paying it to criminals? That might make a real difference.

[bhikkhu]

3. The food stamps program is one of the government's most effective

it feeds people, it puts money directly into the hands of people who need it for a very good cause, and it puts money into local markets.

If it reaches 46 million people, so much the better. If people are staying on the program, good for them. I'm sick of hearing about the lazy poor people becoming dependant on food aid. If we can't get a decent minimum wage hike passed, and if we can't get a jobs bill passed, and if we can't force corporations to hire more people, what we can do is stop shaming people for still needing to eat.

[jtuck004]

4. And i'm sick of people telling me this is a good thing, while they pay bankers $85 billion a month

to support their homes, and yachts, and college educations for their kids, and cash in their offshore accounts, and make excuses as to why so many government employees are being laid off, why we are replacing good jobs with shit jobs on a wholesale basis. In fact, why so much of our country works to support, at a very, very comfortable level 1% of the people, leaving the rest to fall into a ditch.

Btw, this "wonderful" program you think so much of pays less for a person to eat on than fucking Aramark spends to feed a prisoner every month. Which may be why some little kids cry when they leave school on Friday, knowing they won't get another meal until they come back on Monday, because it's near the end of the month.

How 'bout we divert that $85 billion a month and INVEST it in working people - maybe stop some of the families from being dragged from their homes in foreclosure, or perhaps make tuition free for the next year in all state colleges, or re-build some roads and bridges, or even hire some teachers back.

And maybe, just maybe, a few million of them could then tell us to shove our benevolence, and our food stamps, where the sun don't shine.

I would love to see that day.

[bhikkhu]

7. I assume you're talking about "quantitative easing"

To say that program takes tax money and gives it to bankers is simply false.

[jtuck004]

9. Up is down, war is peace - yeah, I gotcha. n/t

[bhikkhu]

10. Quantitative easing is complicated to understand

but it is in effect a stimulus to the economy as a whole. Other things might have been done, but for the ideologies in congress.

Perhaps more than anything else it is directed toward repairing the shattered housing market, which was from the beginning projected to be the biggest long-term problem of the 2008 collapse. Now we have housing values and construction in full recovery - that should be reality enough.

[jtuck004]

12. It's not complicated at all. The housing market was shattered, and the greedy, rich capitalists at

the banks were made whole, while tens of millions of Americans were, and are, left floundering, to die in their own shit, while people who want to support thieving, criminal bankers make excuses and say "it's complicated".

The housing market is just a bunch of paper - what was shattered was the lives of tens of millions of peopl, it's just more convenient for liars and their friends to talk about it that way in mostly white, I mean polite, company.

It's' not complicated at all. One just has to look at who has the money at the end of the day, and note that it is greedy, lying scumbags and the people they have purchased making all the excuses.

[midnight]

5. Great comments... And your graph explains why the snap program was left out of the budget... Looks

like it was feeding to many folks...

[Igel]

6. Details matter.

That $85 billion goes to two things, primarily.

1. Treasury securities. It's the Treasury buying up the bonds issued by Treasury that are needed to cover the deficit. It keeps the interest rate down; interest is paid to the government by the government. So instead of paying $300 billion for interest, we only pay $250 billion. (Ooh, think of what we could do with $250 billion.) It inflates the money supply; this might trigger price inflation or might just be fending off deflation. Depends on your model.

2. Mortgage-backed securities. When I got a mortgage I gave some bank an IOU. Now, back in the '90s in the big anti-redlining/"ownership-society" push lots of small banks in minority neighborhoods had a lot of mortgages. So many, in fact, that they couldn't issue more. This was a political problem so mortgage-backed securities were authorized. That small bank bundles those mortgages and sells them to some investor. The bank makes less money than it would, but it makes it now instead of over 25 years. It also has its capital back and can issue more mortgages. (A useful tool, this practice spread wildly and led, ultimately, to a big part of the 2008 bubble because the way the securities were bundled and divvied up was too complex.)

This frees up a lot of mortgage money. That means, all things considered, mortgage interest rates are lower. You like the "housing recovery", you have to like this program. And while banks make short-term profit, the Treasury gets free income from those mortgages (or, if it doesn't, it strengthens whoever it buys them from by gobbling up bad debt--this was the purpose of the TARP). The income is free because the money used to buy up the income-producing securities is, again, created for this purpose.

Note that a lot of the securities aren't bought from banks but from things like Freddie Mac, "government sponsored entities." Many Democrats rave about how the GSEs are doing in the last few years because of Obama. This is one of the tools that let them do so well.

Conclusion: The effect of this is to put $85 billion either into mortgage-issuing agencies or into the government coffers for spending. In 12 months that's going to be $1.020 trillion, and it's going to have the same effect as a $1 trillion stimulus package. The only difference is how the money gets into the economy.

[bhikkhu]

8. Very good explanation!

I was trying to come up with a simple way to explain it, and didn't get very far. Other types of stimulus might be easier to direct more specifically to those most in need, but this one has actually worked pretty effectively.

The best long-term approach, for one with objections to "quantitative easing", isn't half-baked polemics about bankers, but electing people to office who are genuinely dedicated to public service and good governance.

[jtuck004]

11. There are 21 primary dealers, JP Morgan and Goldman Sachs being at the top of the heap,

and the primary beneficiaries of the profits. And they are giddy with profits, as opposed to the 50 million people on food stamps, the 100 million who are now underemployed, etc.

Certainly it frees up mortgage money - and the majority of the sales today are being done in cash, by people with a lot of assets, not 5 million people yanked out of their homes by the foreclosures that were allowed to happen while the process was hidden by our laws. Those people can't buy them because their jobs were destroyed in a search for profit at all costs by some of the very same orgs who financed the sale of their jobs overseas.

So that conclusion, inferring that there is no difference between putting $85 billion into the lives of the people that the criminals at the big banks destroyed, vs back into the pockets of the big banks sounds like something JP Morgan and Goldman Sachs would cheer heartily.

[suffragette]

13. Sounds like a further shift away from austerity

Which is a good direction.

I wonder whether some the onerous austerity measures imposed on countries like Greece, Ireland and Spain will be lessened.

ETA from article:

While not openly critical of austerity measures like the across-the-board automatic federal budget cuts in the United States, the statement suggested most governments see recovery as too weak to risk reducing spending on unemployment benefits, job training, education and other public sector outlays.

Not even Germany objected to the new wording, said a senior Treasury Department official who attended the two days of meetings in Moscow.

“The debate between growth and austerity seems to have come to an end,” the official said.