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I did leave out the $200b or so of tax cuts ... but apart from the tax cuts that were originally promised before the full extent of the economic crisis became clear, the rest were just the political cost of the obsolete institution of the filibuster and of the PAYGO legislation (which was obsolete on passage).

The magnitude of the borrowing with "hoped for recovery" does show the challenge in getting actual stimulus done.

As to why the stimulus spending should be government spending rather than private spending ... we live in an economy where 2.2% of spending on GDP is federal government, non-defense spending, and 70% of spending on GDP is consumption spending. IOW, as JK Galbraith pointed out long ago, an economy of private affluence and public poverty. For a large number of the actual stimulus spending programs, the long term payoff really is substantial.

And it is really important for the US government to get back to the Hamiltonian system which served us reasonably well from 1790 to 1970 of the government investing in infrastructure that would support the development of new industry. Gaining the ability to do new things, and the ability to do the things we are presently doing better, is quite urgent, after a decade of reversing course and over two decades of heading rapidly in the wrong direction.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sat Feb 28th, 2009 at 05:40:52 PM EST
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Thanks for the reply. You do make sense, and I actually agree with much of your analysis.  However, it is still difficult to understand.  I guess, as is usually the case, most simple answers don't prove to be completely correct.

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has. -Margaret Mead
by blueneck on Sun Mar 1st, 2009 at 12:41:26 AM EST
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... confuse matters for political ends, and the normal media often (+) just reports them as part of the mix in their "he said / she said" style of reporting. "Concerns have been raised ...", when just a little research will show that the 'concerns' are simply political noise to create doubt and confusion and nothing more.

(+ not invariably, though ... I did enjoy seeing a Republican Congressman trying to push the "$8b for Harry Reid's magnetic levitation train from Disneyland to Sin City" line and get smacked down by the television reporter asking "questions" along the lines of, "isn't that just untrue? There is a list of designated high speed rail corridors and that line is not on the list.")


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Mar 1st, 2009 at 10:40:08 AM EST
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