Government Spending

If We Only Spent All the Money, Then Everyone Would Be Prosperous!

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Every day is Christmas for the Naples Fire Department. ||| Naples News
Naples News

On the front of today's New York Times business section is a remarkable—or should I say remarkably unremarkable—news article whose entire premise, unchallenged in the course of 1,341 words and input from 10 sources, is that more government spending is a very good thing because it leads to more government jobs and therefore helps the economy. Hooray!

If you think I am being unfair in this characterization, consider the headline: "Government Spending, Edging Up, Is a Stimulus." Or the headline on the jump page inside: "Rebound in Government Spending Starts to Aid Economy After Years of Cuts." Or the headline on the associated chart: "A Small But Important Lift." Or the blurb: "The public sector is once again adding to prosperity." Before consuming some counter-factual questions, enjoy the celebratory sounds of friction-free assumptions and loosening belts:

NAPLES, Fla. — For a long stretch, government spending cutbacks at all levels were a substantial drag on economic growth. Now, finally, relief is in sight. For the first time since 2011, local, state and federal governments are providing a small but significant increase to prosperity. […]

And so on a recent windswept afternoon, John Lynch, armed with a police radio and a giant net, stood along a fishing pier in Naples, on guard for pelicans that might become entangled in fishing lines.

"That's my job, to try and get them to safety," said Mr. Lynch, a retired banker with a snowy beard whose uniform was a fisherman's cap and shorts. Mr. Lynch is one of the latest additions to the city's payroll. His is the kind of government job this Gulf Coast town never would have even contemplated during the recession. […]

"This new revenue, the increase in the economy, the increase in G.D.P. —everything is looking good," [said Ron Haskins, a senior fellow at the Brookings Institution]. "It's releasing pressure to be fiscally restrained." […]

The Naples Pier outreach assistant job was a minor item in the $32.9 million budget, but an important symbol that times were flush again. […]

The Naples Fire­Rescue Department just bought two new emergency vehicles worth $196,000 each. One of the boxy red trucks arrived last month, just in time to be steered gingerly down the route of the city's annual Christmas parade, where palm trees were adorned in white holiday lights and children darted for candy tossed from holiday­themed floats.

It is an event so precious to locals that the city kept it going during the downturn, said John F. Sorey III, mayor of Naples.

"We've got to preserve the wow factor," he said, "or all our tourists could go somewhere else."

No, fuck you, cut spending. |||

Credit where it's due: As government-spending euphemisms go, preserving the wow factor is surely in the Top 20…

I have only four questions for the NYT and those who agree with its premise that the more government spends, the more prosperous we are:

1) Why were states not measurably more prosperous after increasing government spending by more than 80 percent in real terms between 2003 and 2007?

2) Between the time of Bill Clinton's last submitted budget of $1.8 trillion, and Barack Obama's first submitted budget of $3.6 trillion, did the average American become more or less prosperous?

3) The United States after World War II, Canada in the 1990s, and Australia in the 1980s all became significantly more prosperous—despite ample warnings to the contrary—after cutting, not increasing, government spending. Wha' happen?

4) Is there a ceiling on what percentage of GDP the government should account for, and if so why should there be one, and where should it be?

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  1. And to think that it was only like three or four days ago that the big lefty talking point all over the place was about how spending as a share of GDP has gone down in recent years, and how Obama and the democrats deserved all the credit for this (even though it was caused entirely by total budgetary gridlock between the house and the senate).

    1. As I keep saying, the Obamessiah (swt) gets all of the credit, and someone else gets all of the blame.

      1. That is how the SSGT in charge of my section in the Marines would divvy up work each morning.

        Any gear that was broken or needed tuning was “mine”. Any gear that worked and was ready to go was “his”.

  2. …”For a long stretch, government spending cutbacks at all levels were a substantial drag on economic growth.”…

    This might well be true, in which case, it is obvious that the city has no functional economy.

  3. Another question: why isn’t France, with government spending exceeding 50% of GDP, rolling in dough right now?

    1. Europe is suffering from austerity. I read it in the newspaper, so it must be true.

      1. Let me help here.

        The Liberal definition of “austerity” is “I wanted stuff and could not buy it.”

        (At first I had an error in my definition and had “did not buy it” which is silly because liberals only stop buying when forced to.)

        1. I thought it was:
          “I wanted stuff and nobody gave it to me for free!”

          1. Austerity in Euroland has resulted in spending, as a percentage of GDP, increasing from about 42.5% to around 47.5%. The “austerity” has come in the form of higher taxes which — as you would expect — decreases economic activity, thereby changing the above mentioned ratio between government spending and GDP. Thus, Europe is in recession. Obviously (?) they need to spend more.

            Does anyone believe the economy would be better here if government spending was 75% of GDP? Yup! There are some intellectuals who believe that to be desirable.

      2. My brother is a public high school English teacher and I had lunch with him and one of his fellow teachers, a new hire, a while back. His coworker was going on with the whole austerity, cut to the bone, those fucking Tea Partiers and Rethuglicans, etc., spiel–this was one of those amusing situations where people assuming that because of my company that I’m a fellow traveler.

        It became blatantly obvious to me within minutes that he’d chosen his career path so that he’d have a captive audience to lecture to and punish/reward based on how they responded to his political biases.

        1. I encountered a couple of those shitheads when I was in high school. They really didn’t like it when I pointed out that FDR was a fascist.

          -jcr

          1. Oh that’s crazy. What’s fascist about sending ethnic minorities to concentration camps?

          2. I had one of those in Jr. High. I called Mr. Steinbroner the Socialist Studies teacher.

        2. This is also what happened in every social sci or humanities class I ever took in college.

          Smart people debate things with those they disagree with. Leftists assume they already won the debate and everyone who isn’t a convicted Nazi war criminal surely already agrees with them on everything.

        3. I tended to punish instructors like that for pushing their leftist poison. They learned not do that around me.

    2. ..and one thing I really want to ask Krugman is why Zimbabwe isn’t the richest country on the planet, the way they inflated their money all to hell.

      -jcr

  4. 4) Is there a ceiling on what percentage of GDP the government should account for, and if so why should there be one, and where should it be?

    You know perfectly well they’ll never answer that question.

  5. I keep telling you people, if spending trillions is great, infinite spending is infinitely greater.

    1. You people?

      1. He is mimicing Liberals, when you hear “you people” remember to HEAR “you little people” and it will all make sense.

  6. I’ve spent time in Naples,hell,their rich.They don’t need hand outs! That whole area is swimming in cash,fuck them,Many are rich old folks,and they can’t driver for shit.The keys in that area are rolling in cash!

    1. Their rich because they’re government spends enough of they’re money.

      1. Or they are rich because government gives them enough of someone else’s money.

      2. Their rich because they’re government spends enough of there money.

        FTFY

        1. Thanks. I was unsure of that last use of “they’re”.

          1. Just wanted more diversity!

        2. Um… The way I read it it should be “their”.

          1. Witch won?

            1. Its always the same. Some grammar genius has to come along and show there smart.

              1. Sure you don’t mean “sum grammar genius has too cum along…”?

  7. The only thing better than deferred consumption is consumption of your savings by someone else.

  8. To get an accurate picture of economic health, government spending needs to be subtracted from GDP, not included as part of it.

    1. What about increased economic activity based on govt fiat like the ACA? Fascist, but it’s not technically govt spending.

      1. I’m pretty sure the subsidies to the poor in ACA overwhelm the increased spending of the rich. We’ll see if that’s the case if the insurance companies come begging for a bailout or a rewrite of the legislation.

    2. Increased health care demand would matter more if the supply were allowed to grow to compensate. It’s not allowed to grow to meet demand so any increase in spending has minimal effect on economic growth.

    3. Yes, but the ratio between Government spending and GDP is a very good barometer of poverty, a higher portion of government spending being really good for the expansion of poverty.

    4. IMO, government spending does add to GDP. It’s just that the taxation required for that spending reduces GDP (probably by more than it’s increased). Hence, borrowing. But, the borrowed money must be paid back, so interest becomes a reduction in GDP. (Is interest on the debt calculated in the official GDP?) Either way, the increase in GDP is offset by a reduction in the form of taxes or paying interest on the debt.

  9. It all makes sense when you realize it’s not their theory, it’s their religion. The “fact” that government spending makes us all more prosperous is their dogma, and will not be slain on the altar of truth…

    1. Many people have been and millions more will be slain on their alter sadly.

  10. Cudos for the second image Alt Text.

  11. And the New York Times continues its race to become a badly written, provincial paper of no importance.

    1. It will still be the missalette of progressivism preferred newspaper for social signaling newspaper of record.

    2. Race to bankruptcy and nonexistence seems more appropriate.

  12. Why don’t these people remember the nineties as the dark ages and the GWB administration as a golden age, given the differences in the curve of federal spending between those times?

    When will all of the tax money that has been poured into cities like Baltimore for the past several decades finally work its magic?

    1. It has worked the desired magic.

      The people who received all the money are happy, most of the people who coughed up the money live somewhere else, and a new round is coming up soon to enrich the same folks who got the money in previous rounds in the name of fixing the same problems.

      See? Magical isn’t it?

      Remember, robbing Peter to pay Paul will get you Paul’s vote, and costs you nothing if Peter does not live in your district!

      1. Even better if Peter reads the New Yorker and would slit his wrists in shame at the notion of entertaining a ‘reactionary’ thought.

    2. It totally is working in Detroit. Out of bankruptcy, onward and upward! It took a few hundreds of millions of dollars stolen from others, but NOW – finally! – prosperity is JUST around the corner!

      *plays “Happy Days Are Here Again” on the Victrola?*

  13. If We Only Spent All the Money…

    Well, the national debt recently surpassed $18T, so haven’t we actually spent a lot more than all the money?

    1. No, no, no! As long as somebody is saving a penny somewhere, then we haven’t spent all the money, and we therefore haven’t any prosperity!

  14. an important symbol that times were flush again.

    Idiots never learn. Ever.

  15. Funny how liberal politicians love to crow about some minor, cronyist tax cut while simultaneously doing jack shit to help the average person. It’s almost like they know their policies are harmful but double down on them anyway.

    1. They will never quit. Ever. Which is why I make room for the possibility that they may have to be killed in a violent revolution.

      I’m sure I will be accused of being vicious again. Yet no one hear ever proposes an actual solution to progressivekind.

  16. did the average American become more or less prosperous?

    The average American does not deserve prosperity. However, all true believers in the power of The Cronies have made off like bandits.

  17. GDP is such an unreliable indicator of prosperity. Any government spending cuts will automatically decrease GDP, given that government spending is a component of GDP.

    With the public relying on GDP, the deck is stacked against proponents of spending cuts; how convenient for statists.

    1. One other thing: the mainstream definition of “austerity” is twofold – spending cuts and tax increases.

      Why doesn’t the left demand we eliminate taxes on top of spending increases?

      1. Because we need taxes to punish

        1. Recrimination against the wealthy is the most important component of any tax.

        2. It’s true. My Marxist retired CA college professor Aunt finally admitted that taxation is not about revenue generation. It is about redistribution and punishing certain segments of the population. And hurting ‘big corporations’.

  18. my co-worker’s step-sister makes $74 an hour on the computer . She has been fired from work for nine months but last month her paycheck was $16572 just working on the computer for a few hours. Read Full Report…………
    ????? http://www.netjob70.com

    1. Being fisted on web cam while simultaneously jerking off dwarves pays pretty good!

  19. If you think I am being unfair in this characterization, consider the headline: “Government Spending, Edging Up, Is a Stimulus.” Or the headline on the jump page inside: “Rebound in Government Spending Starts to Aid Economy After Years of Cuts.” Or the headline on the associated chart: “A Small But Important Lift.” Or the blurb: “The public sector is once again adding to prosperity.”

    Ok, ok, ok, I’m convinced: you’re NOT exaggerating!

    “We’ve got to preserve the wow factor,” he said, “or all our tourists could go somewhere else.”

    That comment eerily reminded me of a hollowed-out coconut with a small hole and a treat inside, the whole thing being tied to a tree…

    Where else would a county that relies on tourism get its revenue except through extorting money from unsuspecting tourists brought in by the “Wow!” factor?

  20. Caramba.

  21. Forget it Matt, its NYT-Town

  22. If employing ONE guy to watch for entangled pelicans is a boon to the economy, why not hire 10? Or 100?

    1. So many poor Pelicans, and pitifully few Pelican patrollers.

  23. my neighbor’s step-aunt makes $80 an hour on the internet . She has been laid off for five months but last month her payment was $12901 just working on the internet for a few hours.
    website here……..
    ???????? http://www.paygazette.com

  24. And so on a recent windswept afternoon, John Lynch, armed with a police radio and a giant net, stood along a fishing pier in Naples, on guard for pelicans that might become entangled in fishing lines.

    I wonder if I can finally get on a city’s payroll as an administer of funny walks.

  25. my co-worker’s step-mother makes $82 /hour on the laptop . She has been fired from work for ten months but last month her pay was $13096 just working on the laptop for a few hours. check here……..
    ?????http://www.netjob70.com

  26. my co-worker’s step-mother makes $82 /hour on the laptop . She has been fired from work for ten months but last month her pay was $13096 just working on the laptop for a few hours. check here……..
    ?????http://www.netjob70.com

  27. i buy almost everything except food and clothing from online auctions most people aren’t aware of the almost I unbelievable deals that they can get from online auction sites the site that has the
    best deals is…… http://www.Work4Hour.Com

  28. “That’s my job, to try and get them to safety,” said Mr. Lynch, a retired banker with a snowy beard whose uniform was a fisherman’s cap and shorts. Mr. Lynch is one of the latest additions to the city’s payroll. His is the kind of government job this Gulf Coast town never would have even contemplated during the recession.

    As much as I think this is an admirable thing to do, maybe we could manage to save pelicans without having the job financed by a taxpayer shakedown with all the inherent corruptions that are entailed by the application of state power.

    I wonder what you’d call a system like that.

  29. You will never, ever, get a progressive to answer #4. At best, you’ll get “let’s cross that bridge when we come to it”.

  30. “New York Times Business section…”
    Is that like the “healthy eating” section of a Cheesecake Factory menu?

  31. I love how the left bastardizes Keynes. Even Hayek, who was good friends with Keynes, noticed this:

    “I regard him as a real genius, but not as a great economist you know… not a very consistent or logical thinker; and he might have developed in almost any direction; the only thing I am sure is that he would have disapproved of what his pupils made of his doctrines.”

  32. The freakishly cheap gas prices (Was $2.30 per gallon in some places in LA, which is unheard of) and a respectable rebound in employment rate, construction and housing market is helping the economy. Holiday spending and hiring was up this year. What does most of that have to do with government spending? Oil prices fell because the oil producers refused to restrict supply in a depressed global economy.

    If the government pays me $50.00 an hour to file records and put me on a pension plan, of course I’ll be prosperous. I may go on a shopping spree and help the economy. But where does that money come from?

    Why did the federal government offer to help for medicaid? If each state build 20 hospitals and hire thousands of doctors, nurses, administrators, they’ll be all wealthy, right?

    1. The good thing is California should be raising the gas tax, so more stimulus!

  33. “For a long stretch, government spending cutbacks at all levels were a substantial drag on economic growth.”

    What trash. Government has nothing, and therefore it can only take FROM the economy, not give TO the economy. At best, government is a blunt instrument for the redistribution of wealth. The price discovery mechanism must be allowed to function, in order to best allocate resources according to the demands of society. Government can never be as good as the market at doing this. I can’t believe some people buy this leftist crap.

  34. i buy almost everything except food and clothing from online auctions most people aren’t aware of the almost I unbelievable deals that they can get from online auction sites the site that has the
    best deals is…… http://fave.co/14gVp3h

  35. The only thing the government produces that adds actual value to the economy is any research and development that is shared with the private sector.

    That’s actual, tangible product or information that can be produced or utilized in producing other products, without using money taken from taxes.

    There are many government jobs that are necessary, even vital to the safety and security of the nation. But even they produce nothing at all for the economy.

    If you want to see an extreme of wasteful government makework jobs and featherbedding, look up what happened when Mark Zukerberg decided to give $100 million to New Jersey to improve their schools. The money went like pissing on a forest fire and if anything, the schools ended up worse. What makes it especially nasty is the opponents to all the reforms said privately that those reforms were *exactly* what had to be done, but since it wasn’t coming from the unions and Democrat politicians, they fought against everything they knew needed to be done.

    1. Ideally, government produces order, a framework within which we can relate to each other without violence and crime. This is valuable. It is a neutral referee of dealings between different people and organizations. Unfortunately, it seems inevitable that government exceed this role since humans are fallible and corruptible and governments are run by people.

  36. On the plus side, the article serves as a nice summary of the socialism based economic illiteracy so popular among Democrats and other Leftists.

  37. i buy almost everything except food and clothing from online auctions most people aren’t aware of the almost I unbelievable deals that they can get from online auction sites the site that has the
    best deals is…… http://www.Jobs700.Com

  38. my classmate’s ex-wife makes $81 /hour on the computer . She has been unemployed for eight months but last month her pay check was $18269 just working on the computer for a few hours. check…………..
    ????? http://www.netjob70.com

  39. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for 74 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least per hour. I work through this link, go to tech tab for work detail
    ———– http://www.paygazette.com

  40. Also, if the spending reduces the amount of money people, (especially the middle class) have to spend because of higher taxes, isn’t that kind of stimulus rather inefficient?

  41. I Got Hooked On Having An Online Business Almost A Decade Ago When I Created An Online Course And Made My First.

    —–http://tinyurl.com/cashclick1

  42. Except for periods in the 1950s and 1960s and possibly the 1990’s when tax rates on the rich just happened to be high enough to prevent overinvestment, the economy has generally suffered from periodic overinvestment cycles.

    It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.

    Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. …”
    http://seekingalpha.com/article/1543642

    1. So……..the rich not being taxed enough makes everyone poor? Over leveraged assets and bad investments are a much more realistic culprit.

      Your premise is profoundly flawed.

      1. “Your premise is profoundly flawed.”

        You’re too kind:
        Lefty ignoramus is ignoramus.

  43. Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for 74 this – 4 weeks past. I began this 8-months ago and immediately was bringing home at least per hour. I work through this link, go to tech tab for work detail
    ———— http://www.paygazette.com

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