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Wed Apr 24, 2013, 03:50 PM

The Economic Argument Is Over Paul Krugman Has Won


For the past five years, a fierce war of words and policies has been fought in America and other economically challenged countries around the world.

On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This "stimulus" spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.

On the other side were economists and politicians who wanted to cut spending to reduce deficits and "restore confidence." Government stimulus, these folks argued, would only increase debt loads, which were already alarmingly high. If governments did not cut spending, countries would soon cross a deadly debt-to-GDP threshold, after which economic growth would be permanently impaired. The countries would also be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates. Once government spending was cut, this theory went, deficits would shrink and "confidence" would return.


So the empirical evidence increasingly favored the Nobel-prize winning Paul Krugman and the other economists and politicians arguing that governments could continue to spend aggressively until economic health was restored.

And then, last week, a startling discovery obliterated one of the key premises upon which the whole austerity movement was based.

Read more: http://www.businessinsider.com/paul-krugman-is-right-2013-4#ixzz2RPpBa400

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Reply The Economic Argument Is Over Paul Krugman Has Won (Original post)
Bill USA Apr 2013 OP
CalFresh Apr 2013 #1
Bill USA Apr 2013 #2
geek tragedy Apr 2013 #3
Dragonfli Apr 2013 #4

Response to Bill USA (Original post)

Wed Apr 24, 2013, 04:06 PM

1. Look where the stimulus money is ending up.



The rich are getting richer, while the rest lose ground.

The net worth of American households grew by $5 trillion in the first two years of the economic recovery, but not everyone shared in the riches.

The top 7% of American families saw their wealth grow to $25.4 trillion in 2011, up from $19.8 trillion two years earlier. The remaining 93% of Americans experienced a decline in net worth to $14.8 trillion, down from $15.4 trillion, according to a new analysis by the Pew Research Center.

The dividing line between the two sides is $836,033 in 2011. The 8 million U.S. households with a net worth at or above that point got richer as America pulled out of its recession: Their average net worth rose by 28% from 2009 to 2011. Meanwhile, the 111 million remaining American households saw their wealth decline by 4%.

Why such a difference in fortunes? It's because the rich are much more heavily invested in the stock and bond markets, which rallied during the recovery. Less affluent households typically have their wealth tied up in their homes, and the housing market remained flat between 2009 and 2011.
By 2011, the average wealth of the top tier was almost 24 times that of the rest of Americans. Two years earlier, the ratio stood at less than 18-to-1. END

President Obama is the greatest thing ever to happen to the super rich.

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Response to CalFresh (Reply #1)

Wed Apr 24, 2013, 04:38 PM

2. this is why the GOP has fought the stimulus at every step? LOL. IF it was going to the rich the GOP

Last edited Wed Apr 24, 2013, 06:34 PM - Edit history (1)

would have voted overwhelmingly FOR it instead of threatening to filibuster (or filibustering) - it every time a stimulus bill was proposed.

In 2011 in order to extend unemployment insurance (a [font size="4"]big[/font] winner among the independently wealthy ) - Obama had to agree to extend the infamous Bush tax cuts - for the wealthy (most of which went to the wealthiest 10% of the population) which played a part in creating the TRICKLE DOWN - DEREGULATION disaster - the worst economic disaster this country has seen since the First Great Depression.

...go here to see what the stimulus money was spent on.

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Response to CalFresh (Reply #1)

Wed Apr 24, 2013, 05:01 PM

3. Oh look a newbie claiming that stimulus is bad using fake leftwing arguments.


The part of the puzzle you're not providing is the fact that the wealthy lost more money from 2006-2009 than average folks did, because their wealth was tied to stocks. So when those stocks recovered value, so did their wealth.

To put it another way: a lack of stimulus would have fucked the middle class and poor beyond belief.

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Response to Bill USA (Original post)

Wed Apr 24, 2013, 09:00 PM

4. I always wondered why record corp. profits weren't "confidence" boosting enough.

Why do these people think austerity works like some sort of "enhancement" drug

Does the thought of spending less to help society and screw all but the .01%give them a sardonic smile to go with their #%ners?

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