Obama: U.S. must "spend our way out of recession"

[The Northerner]

Source: Tampa Bay Online

WASHINGTON - President Barack Obama outlined major new government stimulus and jobs proposals on Tuesday, saying the nation must continue to "spend our way out of this recession."

Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.

"We avoided the depression many feared," Obama said in a speech at the Brookings Institution, a Washington think tank. But, he added, "Our work is far from done."

For the third time in a week, Obama sought to focus on job creation, noting that the jobless rate continues in double digits and that "a staggering" 7 million Americans have lost jobs since the recession began in December 2007.



Read more: http://www2.tbo.com/content/2009/dec/08/081126/obama-spell-out-new-job-creating-initiative/news-breaking/

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So, I suppose this money that will be spent will come from either more money printing or overseas borrowing?

[closeupready]

1. As long as you raise taxes on the rich FIRST.

Then I'm fine with that.

Otherwise, no deal.

[beyond cynical]

31. Are you rich...?

[closeupready]

35. No.

n/t

[Lorien]

68. Are you?

Do you make over $460k a year? That's where the Bush tax breaks started.

[beyond cynical]

70. No, but I thought the new definition of rich was $200k.

[Lorien]

72. Lol! No, that's just slightly "upper middle class"

The rich are in a whole different stratosphere. I have friends who make $350k a year and they KNOW they're not yet at the level of the "wealthy".

[C_Lawyer09]

40. How about a focus on recouping the corporate missing revenue

Close the damn tax loopholes. Simplify the tax code.

[TwilightGardener]

2. TARP unused funds.

[Craftsman]

5. Tarp unused funds are borrowed like the rest of it

This is like getting $1000 out of your credit card, spending $800, and then being happy you have $200 in your hand.

[TwilightGardener]

11. It was allocated, and not needed. If Obama returns it unused to pay

back the deficit, DUers will bash him. If he uses it to fund more infrastructure projects, help small businesses, etc., DUers will bash him. Same shit as always.

[C_Lawyer09]

41. What the hell are these nebulous infrastructure projects

Other than road work? Just curious, because I see a shitload of roadwork but nothing else. Not saying it isn't there, but haven't seen any illuminating articles either.

[dixiegrrrrl]

48. What kind of Chinese cement are they putting on the roads, I wonder.

Having watched the SF Bay bridge re-building disaster, I have reason to be concerned about where we get our building materials.

[Roland99]

63. Orlando officials are really pushing for commuter rail (SunRail). We could REALLY use it down here.

I'd gladly ride it to avoid the congestion on I-4 or the tolls on the 417/408.

[NRaleighLiberal]

3. so we all need to go out and buy new Lexuses and Mercedez Benz, like the TeeVee ads tell us to???

[superconnected]

6. I think he's saying more corporate welfare with our tax dollars.

[NRaleighLiberal]

10. Yes, I suspect you are right...but is the image that came to mind when I saw the OP!

[TwilightGardener]

8. I think he's talking about government spending.

[4_TN_TITANS]

29. Don't need a fancy ride or electronics

but I will probably jump on any real help to replace our old wooden windows. Our heating / cooling bill would be cut in half.

[maseman]

4. He's 100% correct

But people need jobs before they can spend money. Create the jobs...people will spend.

[waterscalm]

14. Aren't we a 70=80% Consumer society? anyway, yes, in order to

be the same consumer society we were before the Fall last year, we do need jobs.

[Craftsman]

7. "spend our way out of recession" is like screwing our way to virginity

[dixiegrrrrl]

49. or drinking our way to sobriety.

Feels good when you are doing it, does not solve the problem, and creates bigger problems down the road.

[superconnected]

9. He's talking specifically about spending to make job creation

"For the third time in a week, Obama sought to focus on job creation, noting that the jobless rate continues in double digits and that "a staggering" 7 million Americans have lost jobs since the recession began in December 2007.

While his proposal did not include the kind of direct federal public works jobs that were created in the 1930s, he said government could set the stage for more job creation by private businesses."

[endless october]

12. unemployed people don't buy as much.

all of the deficit spending in the world doesn't change that.

end the war and the failed drug war and you won't have to borrow tons of money from China.

[Iowa]

34. +1

[waterscalm]

13. Ok, but pass me a few bucks and I will spend away.

[Lurks Often]

15. Spend what?

Thanks, but I won't be spending any more then I have to, I am just barely making ends meet as it is.

[superconnected]

16. Bush said to spend your personal money, Obama is saying he wants to spend our taxes on creating jobs

Nothing in the article is telling US citizens to go out and spend their own money.

He's not Bush. He has better answers than that.

[havocmom]

17. Fine. Raise minimum wage to a living wage. Fortify laws protecting unions

Tax the rich, as it is proven trickle down doesn't do the trick.

Caps on credit card interests and changes in minimum required payments.

UNIVERSAL SINGLE PAYER HEALTH CARE. <--that would free up some consumer spending and save the endangered middle class which is the sector that makes the economy stable or even grow.

Stop putting the onus on the lest of the classes and the economy will improve.

Update the Clinton era meme: It's the class divide, stupid!

edited for typo

[Arctic Dave]

32. Yes, yes and hell yes.

[C_Lawyer09]

42. One good thing is that some states and municipalities

Take it upon themselves to provide a livable minimum wage. Of course, there is a fine line between number of jobs provided, and wages provided. And, as long as global competition stays as fierce as it is now, I sadly don't see wages increasing, just possibly jobs.

[Auggie]

18. Bullshit plan unless the concrete, steel, solar panels, insulation, etc. IS ALL MADE IN THE USA

[amandabeech]

30. Yes. And we need more "Made in the USA" consumer products to buy

with our wages, too.

I'd like to buy my uncle a Made in the USA electric razor for Christmas. There doesn't seem to be such a thing, or at least Target doesn't carry it in my area.

[bluestateguy]

19. No recession was ever ended by cutting spending

I cannot think of one.

[C_Lawyer09]

43. However, the fed printing more money

can certainly increase inflation, which is the same, but different.

[kpominville]

20. A recession is reduced spending

So of course we have to increase spending to get out of it. What needs to change is the irrational belief in trickle down economics. We need to rebuild our economy from the ground up and that WILL involve a lot of spending.

Anyone who says you can't spend your way out of a recession is like saying you can't save a drowning person by helping them breathe.

[Locrian]

21. supply and demand

Demand (ie jobs) can only be created by consumers with money. When all the jobs have been shipped overseas, how can that happen?

Short answer is by borrowing.

Long answer, it cant last.

[LeftHandPath]

28. Ding ding ding...

Instead of borrowing to created temporary job relief, why not change the laws that reward corporations for shipping our jobs overseas.

How will this spending stop the next round of US layoffs?

[jobycom]

22. Those are the right things to spend on, at least. Maybe he's finally shifting away from supply sided

economics. His first round of stimulus was almost a supply-sider's dream, giving the wealthiest more money and hoping they spent us out of it.

Investing in infrastructure, while giving tax incentives to small businesses and emerging markets, are good ideas in the right direction. All of that shifts the economy to the backs of middle class and to production, and that's how real wealth is generated. The problem is, we still have to pay for them, and for the past spending bill, and for all the spending Bush did.

Tax increases will have to be part of that. Government has no other way to raise money, and unless Obama is converting to Laffer-curve theory, we need more money to pay for it all.

And borrowing is weakening the dollar, so that our goods sell for less overseas, and our trade deficit grows. We can spend ourselves into a recession more easily than spending ourselves out of one.

He's going to have to increase taxes on the richest, and the more he avoids that, the worse it's going to be when he does it.

[SpartanDem]

25. How was the first stimulus a gift to the wealthy?

[jobycom]

33. I don't know. Since I didn't say it was a gift to the wealthy, you'll have to explain it to me.

[Nihil]

64. Maybe from your comment "giving the wealthiest more money"?

I'm not SpartanDem (the poster who questioned you) but I'm not sure
why you are confused.

:shrug:

ETA: Your entire sentence in #22 was:
> His first round of stimulus was almost a supply-sider's dream,
> giving the wealthiest more money and hoping they spent us out of it.

I'm not disagreeing with the above interpretation - just thought I'd explain
where the quote came from.
:hi:

[Oregone]

23. Fine, Obama, as long as "spending" isn't considered giving out tax cuts

Even to "small businesses" making profits, for all I am concerned

[C_Lawyer09]

44. That is what stimulates small business, other than increased efficiency

Find me the govt. peeps that know how to do that in a way that doesn't cost billions.

[Oregone]

45. Lowering the tax rate on business profits does not stimulate the business

It stimulates the owners/shareholders.

It doesn't give businesses more money to invest. Invested money is untaxed--only profits are taxed.

You stimulate small business by increasing demand

[C_Lawyer09]

47. The small businesses I've worked for don't have share holders

and when they have more disposable income, they buy needed equipment, and hire more people. I might add, that many small businesses are very happy when they are able to pay more for quality workers and lower turnover. Especially the food service industry, which spends a lot of time and money, time also being money to hire people. I'm not talking McDonalds, I'm talking Twisters Pizza, Hot Diggity Dog, etc.

[Oregone]

50. Many small businesses have shareholders, especially with S-Corps becoming popular

But the same concept really applies to sole proprietorships too

"when they have more disposable income"

Disposable income that is utilized is untaxed. ONLY disposable income that is not invested in a company will be taxed. Hence, taxing PROFIT (non-invested income), doesn't diminish a company's ability to buy equipment or hire people.

"many small businesses are very happy when they are able to pay more for quality workers and lower turnover"

And thats all a write-off. Cutting taxes only effects money NOT spent on quality workers (or other investments).

Unfortunately, there is so much mis-information about businesses and taxes from the right that many people don't understand this basic concept. If you lowered the tax rate to 0% on businesses, they would have no more to invest in their businesses. Why? Because taxed money isn't invested in business--it is divested as dividends to shareholders or income to the owners. What is taxed is everything left over AFTER investment is made.

[hunter]

24. Get money to people who would go out to eat if only they had money.

Theres no point in giving more money to the people who already control most of the money.

It's really simple.

A couple of things would end this depression almost instantly:

• A Single Payer Health Plan supported by a progressive income tax.
  
• Public Works projects to reduce fossil fuel use and restore the natural environment.
  
• Subsidies for apprenticeships in fields related to the above public works projects.
  
• Student grants for college, especially in fields related to public health, education, energy, and environment.
  
• Expanded research grants for "long shot" science -- space exploration, fusion power, medicine for unprofitable "orphan diseases," etc.
  
• Subsidies for public and Creative Commons art.
  
• Establish small scale community credit and banking programs
  

I could go on, but clearly the only way to "spend our way out of this" is to get the money to people who will spend it improving their communities rather than gaming it in billion dollar market transactions.

[hedgehog]

26. John Maynard Keynes - look him up. You might learn something.

[laughingliberal]

57. I'm not sure anyone remembers the tried and true tenets of economics which existed

before this scam of supply side economics got foisted upon us. I'm amazed at the number of people on a Democratic website spouting that garbage.

[LeftHandPath]

27. Everybody knows...

the only way to end a debt crisis is... more debt.

Ignorance is Strength.

[Sen. Walter Sobchak]

36. Great... last week he was Bush - this week he is Reagan and next week?

James Buchanan?

[Odin2005]

37. Uh-oh, the Libertarian morons are gonna be whining!

SUCK IT, Liberturdians. :rofl:

[TexasObserver]

38. Recommend

[panzerfaust]

39. Sending our money to China is going to help US?

Kinda reminds be of Jerry Ford's "WIN" program (to deal with inflation. Oh, Ford ... Ford was a pre-RayGun Repub prez).

Recently I read that China is predicted to be the world's largest economy by 2020 - buying more crap from them will simply move that up a bit.

My advice{*} for any given person's financial survival is: Stop Spending, Save your money, Sell Off anything you can.

=================
{*} No Worries Mate: I'm not a "certified financial thief" (sorry, "adviser"), though I DO have NO expertise on the subject - except my own observations on life.

[laughingliberal]

46. Spending which results in job creation is the right kind of spending

Job creation provides the most effective deficit reduction. Revenues increase and deficits begin to be paid down. Roosevelt turned his attention to the deficit in 1937 and created the 'double dip.' Economy went right back into recession. This is the reason Republicans can sit on Fox and spin about how Roosevelt's policies did not work. They cite the fact that we were in recession in 1937 as proof of failure. They fail to say this dip occurred that year and followed the reduction in spending.

[C_Lawyer09]

54. However, the temporary spending will be for not

Unless real savings increase, because as yet this will be the only way to motivate banks to un-ass their massively increased held assets. GDP is not really indicative of a strong economy. For sustained real growth, it must occur bottom to top through business, and not govt. sponsored infrastructure programs, which will compound other developing and gaining problems, which will be visited on the next or next next generation.

[laughingliberal]

56. Well, obviously we disagree. nt

[Aleric]

51. Now we have proof - Cheney is still president

Same hand, different puppet

[SemiCharmedQuark]

61. Yes, I remember when Cheney proposed spending money on improving infrastructure and creating jobs by

weatherizing homes.

[TCJ70]

52. *facepalm*

Fine. End our useless wars and spend that extra money on whatever it is we need to spend it on.

[olddad56]

53. pending our way out of debt ...

is like fighting for peace or fucking for virginity.

It ain't going to work.

[SemiCharmedQuark]

60. Yeah, the CCC, the infrastructure of the New Deal...what disasters those turned out to be.

:eyes:

Geez, DU.

[Hekate]

69. I know my grandpa got back on his feet through the CCC, and many more did through the WPA. nt

[mia]

55. O'Dubya. Be good Americans and spend money, n/t

[TwilightGardener]

65. Once again, someone fails to read past the headline.

[Hekate]

58. All of you: When the man uses "spend" and "job creation" in the same breath, what is your problem?

When Obama talks about building and repairing infrastructure, what is it that you all object to?

Help me out here, because (having once worked in a county public works department) when I hear "infrastructure" I hear JOBS on which someone (such as the government) SPENDS MONEY. Then workers TAKE THE MONEY HOME.

Rachel Maddow all but swoons when she talks about infrastructure, and as admired as she is at DU, you don't understand what that is?

The bridges alone will take a big chunk of change. Nearly all of them are in need of upgrading and retrofitting. There are bridges over a century old that carry lots and lots of traffic every day. There are bridges many decades younger where you can stand under them and see rust bleeding through concrete, and cracks in the concrete. Do you ever wonder if that's maybe not very safe?

Our electrical grid is another piece of infrastructure that is in serious need of rethinking and overhaul. Remember when nearly half the country went dark one night because a circuit someplace blew and the power outage just rolled on and rolled on? That's just stupid, and that's also a system that needs an overhaul.

The wastewater systems in some of our biggest cities are also at least a century old, and no one thinks about that until a major pipe completely rusts through.

The TARP money may be just numbers on paper, but it HAS been allocated by Congress and as far as I am concerned there is no better use for it than simultaneously fixing what's broken and giving people jobs. Republicans who are boo-hooing about the deficit now seemed to have no difficulty mortgaging our great-grandchildren's future when they were bailing out Wall Street while BUSH was still president and funding BUSH'S WARS completely off-budget. Screw them! People need jobs and health care and a country that is not falling to pieces under our feet and over our heads. If I were Obama I would not give up a penny of that money.

Hekate

[dysfunctional press]

66. infrastructure projects don't create permanent jobs...

and not even as many temporary jobs as they used to- automation has even increased productivity in construction as well.

[Tansy_Gold]

73. You're only half correct, Hekate

We need the infrastructure upgrades, absolutely. There was a report just a couple days ago (today is Friday) that decrease in electricity demand has actually allowed for some major repairs, to the point that a repeat of the 2003 black-out is unlikely.

HOWEVER -- the fundamental funding for infrastructure has to come from taxes, and taxes are only meaningful if they come from wealth creation. Not Wall Street imaginary derivative money, but genuine making something money. No matter how Obama spins it, a healthy modern economy has to be based on manufacturing, not spendning.

If the government hands out money, especially money it doesn't have yet, the workers who "earn" that money will have to spend it on things: cars, food, holiday toys, health car, school supplies, whatever. In order to keep the economy chugging along once it's been jump started by the infrastructure jobs, that money has to circulate back into the economy. If it's spent on holiday toys and cheap plastic crap made in China, at least part of that money leaves the economy. It goes to China. It goes into the hands of Chinese factory owners and Chinese workers. Since China doesn't import a whole lot of US made goods in comparison, there's a net drain on the circulation of cash in the US economy. As those dollars trickle away, they can't be spent on more goods and services.

If, however, the worker on the infrastructure job buys US made sneakers and US made bicycles and US made computers, then other US workers are kept busy. Their labor adds to the overall balance of wealth in the US and they spend their earnings on more items. If those items are made in the US, the cycle continues.

When the manufacturing jobs disappear, everything else does. An economy must create the goods its people use or it will die.

This may mean protectionism but it does not mean isolationism. An economy should be able to trade its surplus for the surpluses produced by other economies but on a fair and equal basis in a manner that does not harm the balance.

When large amounts of wealth are withdrawn from the economy rather than maintained in circulation, the economy will die, either slowly or quickly depending on how much and how rapidly the wealth is withdrawn. And that withdrawal tends to be in an acceleration mode -- the more that's pulled out, the more that will be pulled out.

So while the infrastructure repairs are welcomed and necessary, they are not sufficient and never will be. And Obama could throw 10 or 20 or 100 times as much money into that kind of a jobs program, but it would ultimately fail if he doesn't bring back manufacturing jobs. And since he apparently has no intention whatsoever of even attempting to do that, this economy cannot recover. It simply can't.


Tansy Gold

[readmoreoften]

59. Like buying stock after terrorist attacks to show patriotism? Or was that different?

When employers pay enough that we can spend our way out of a recession I see Americans doing just that.

[SemiCharmedQuark]

62. Did you read the article? He's not telling consumers to go out and spend.

He's talking about government spending.

[Hekate]

67. I'm still asking my question from Post 58, because I'd really like to know....

When the man uses "spend" and "job creation" in the same breath, what is your problem?

Hekate

[Delphinus]

71. I just don't understand this.

I've got no money to "spend". (yeah, I know, it's bad grammar.)