View Full Version : Will RIPS spendulus again....

10-18-2009, 07:55 AM

Basically calls out the Dems for saying out loud and in unison: "Bu-bu-bu-Bush!"

Stimulus plan for Democratic incumbents By George F. Will
Washington Post

Published on Sunday, Oct 18, 2009
WASHINGTON: As Harvard's president, Larry Summers, economist and former Treasury secretary, was a lion in a den of Daniels. The faculty Daniels, their tender feelings hurt by his occasional testiness, cowered together and declared him a meanie. Facing a faculty vote of no confidence, he resigned.

Now he is Barack Obama's principal economic adviser. So, weary of John Boehner, leader of House Republicans, dwelling on rising unemployment, Summers sent him a letter. In it he said, as Obama and his minions so consistently do, something that may be the text of this year's White House Christmas card: At least we are not George Bush, so there. Summers said Obama ''is committed to not repeating the fiscal mistakes of the last eight years.''

The letter, like its author, is trenchant and intelligent. He notes that job creation was much better during the eight Clinton years — an average of 225,000 per month — than between November 2001, the end of the last recession, and December 2007, the beginning of this one, when the monthly average was just 94,000. And Summers tartly reminds Boehner that in 2003 the Republican-controlled Congress passed a new prescription drug entitlement ''that was not offset by either spending cuts or tax increases'' and that in its first decade will cost more than $1 trillion, including interest on the necessary borrowing.

But speaking of unfunded medical entitlements: The furrowed Washington brows that currently express faux puzzlement about how the new health-care entitlement — aka ''reform'' — will be paid for are theatrical. There is no mystery. The new entitlement will be paid for, to a significant extent, the way much of government is paid for — by borrowing from China.

Republicans are operatic when they pretend to take seriously, in order to wax indignant about, the Democrats' professed plan to partially pay for Sen. Max Baucus' version of reform by cutting at least $400 billion from Medicare. Supporters of the Baucus bill are guilty of many things, but not, regarding such cuts, of sincerity. Congress regularly vows to make Medicare cuts, and as regularly defers them.

Today, Washington routinely speaks of trillions, as in: This year's trillion-dollar deficit. And the $9 trillion in projected deficits over 10 years. And the upward of $1.8 trillion that Baucus' ''$829 billion plan'' would actually cost in the first 10 years (2014-23) in which its provisions would be fully operational. But the number from which Washington flinches is 999,999,999,997 less than a trillion. It is: 3.
Many Democrats believe that rising unemployment means the nation needs a ''second'' stimulus — but one they could call something other than a stimulus because it would be the third. The first was passed in February 2008, two months after the recession began. Its $168 billion tax rebate failed to stimulate because overleveraged Americans perversely saved much of it.

Admitting that the first stimulus existed would complicate the task of justifying a third one, given that the second one — the $787 billion extravaganza that galloped through Congress last February — has not been the success its advocates said it would be. The administration predicted that if Stimulus II were passed, unemployment would not go above 8.5 percent. On CNN Feb. 9, Summers was asked how soon Americans would ''feel results, the creation of jobs.'' Summers answered, ''You'll see the effects begin almost immediately,'' starting with ''layoffs that otherwise would have happened.'' Summers' formulation resembled various presidential statements, such as his goal ''to create or save'' 600,000 jobs in 100 days and up to 4 million jobs by 2010, and the statement that as of June, Stimulus II had ''created and saved'' 150,000 jobs.

Assertions that things would be much worse if Stimulus II had not been passed cannot be refuted because they are based on bald claims about numbers of jobs ''saved.'' Because those cannot be quantified, the assertions are unfalsifiable and analytically unhelpful. They are, perhaps, helpful to the administration by blurring the awkward fact that since Stimulus II was passed, the unemployment rate has risen from 8.1 percent to 9.8 percent, and probably soon will pass 10 percent.

But one-quarter of Stimulus II will be spent this year. Another quarter will be spent in 2011. Half will be spent in 2010, an election year. Which suggests that Stimulus II is, and Stimulus III would be, primarily designed to save a few dozen jobs — those of Democratic members of the House and Senate.

Will is a Washington Post columnist. He can be e-mailed at georgewill@washpost.com.

10-20-2009, 07:57 AM
The Chinese are going to be facing a lot of their own turmoil and strife over the next 10-15 years. This expansion of theirs is legitimate, but only based on the sheer magnitude of their export business. Their bad debt to GDP is staggering, namely because the government controls all monetary policy, including propping up poorly run companies that lose money simply because those companies are run by the "right" people. They are also so completely dependence on exports to keep the cash flowing in (while it runs right back out the back door) that it severely limits their options when dealing with the US. Toss in the fact that the US completely controls the Pacific, and therefor China's pipeline of exports to the World, and this becomes a very complicated situation for them.

They are also going to face HUGE problem trying to spread the wealth from their coasts inland to where their poorest people are. I actually would not be the slightest bit surprised if China fragments in the next 15 years...

I can't see them actually doing anything radically removed form what their current policy towards us is...it's a delicate balance because they have become completely dependent on US consumption...

10-23-2009, 09:47 AM
Yes, there may be short term trends that buck this, but the backlash China feels will make these moves counter-intuitive for them.

Any move they make that ultimately slows imports to the US hurts them in the long run. They NEED us and they can't really do to much to us in the long haul that won't boomerang back on them.

China is actually in a slump right now and is artificially being propped up by stimulus money...in fact, your own article shows that, QUOTE:

Latest figures show that investment, accounting for nearly 88% of GDP growth earlier this year, is playing a vital role in China's growth

This is all, as I pointed out, going to come back down to exports, and the US accounts for a full quarter of Chinese exports.

Table 8: China's Top Export Destinations 2008 ($ billion)
*Percent change over 2007
Source: PRC General Administration of Customs, China's Customs Statistics
Rank Country/Region Volume % Change*
1 United States 252.3 8.4
2 Hong Kong 190.7 3.4
3 Japan 116.0 13.8
4 South Korea 74.0 31.0
5 Germany 59.2 21.5
6 The Netherlands 46.0 10.8
7 United Kingdom 36.1 13.9
8 Russia 33.0 15.9
9 Singapore 32.3 7.9
10 India 31.5 31.2

So they aren't going to be biting the hand that drives their economy any time soon.