More Americans unhappy with Obama on economy, jobs

More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base, according to a new Washington Post-ABC News poll.

washingtonpost.com/business/economy/more-americans-unhappy-with-obama-on-economy-jobs/2011/07/25/gIQABJ9sZI_story.html?hpid=z3

The Obama policy was government funded stimulus and increased taxation.

We learned after the great depression of the 1930’s that government intervention is not an answer but actually prolongs the economic downturn. It became an established fact.

We are in this current recession/depression due to the same reasons. Government money was handed out for “shovel ready” projects, TARP, etc. Most of this money is down to drain with no real long-term results in the way of businesses and jobs that families can rely upon to buy a home and raise families.

In the words of the great Ronald Reagan, “government cannot solve the problem, … government is the problem.”

You have to reduce taxation on businesses and people to stimulate the economy.

Oh, by the way, you also need to turn off the mainstream media that is blathering endlessly in support of Obama.

Actually what we learned after the Great Depression is that if the Government wanted to step in, it had to do so in a dramatic fashion. As any consertivative will tell you, what got us out of the Great Depression was WWII.

OK so let’s look at what happened during WWII. Almost total employment of the working class. Almost anyone who wanted a job could either join the military or find a job in an industry selling something to the governement. We called that “being on a war footing.” And it was. It was also socialism.

As far as Keynesian economics is concerned; what Obama is doing wrong is not taking over and influencing more of the private sector. Any Keynesian economist will tell you that. And if that is what we want, they would be correct.

Actually Keynesian economist claimed the country would slide back into depression at the end of WW2. Instead consumer demand and world wide trade caused massive economic growth despite gargantuan government cuts in spending. The Keynesian economic model is actually proven wrong by your claims instead of enforcing it.

Well… a lot of things happened after WWII which helped the economy and jobs in the US… Not the least of which was the Marshall Plan, building the Interstate highway system (and other infrastructure projects,) Korea and the Cold War (including the Space Race) employed a great many Americans in government jobs (and jobs providing stuff to the government.) Which gave Americans a lot of money to spend, which supported the economy.

So we end up with millions of GIs coming home with money saved up, having kids, getting jobs, and spending a lot of money which kept the economy humming.

I am conservative as the next guy, but a lot of the US successes in that era could be looked at as utilizing Keynsesian principles.

The real economic boom didn’t happen until AFTER WW2 was over.

US budget 1944 $104 billion

US budget 1945 $106.9 billion

US budget 1946 $66.5 billion

US Budget 1947 $41.4 billion

US budget 1948 35.6 billion

Spending massive amounts of money overseas (the Marshall Plan) actually would boost foreign economies (influx of work and money) while hurting the domestic economy (money removed through taxes) under the Keynsesian model.

The other government programs you listed didn’t happen until the 1950s - after the post war economic boom was well underway.

usgovernmentspending.com/spend.php?span=usgs302&year=1948&view=1&expand=&expandC=&units=b&fy=fy12&local=s&state=US&pie=#usgs302

Of course. No one was spending money during war time. Most everyone was on rations or overseas. The reason for the home building boom (families, remember those) came after the war as well.

Spending massive amounts of money overseas (the Marshall Plan) actually would boost foreign economies (influx of work and money) while hurting the domestic economy (money removed through taxes) under the Keynsesian model.

Someone had to make all that stuff as the European and Asian industries were gone, (China was in the middle of it’s own civil war) that left the USA and US workers.

The other government programs you listed didn’t happen until the 1950s - after the post war economic boom was well underway.

True, but they helped to keep it going.

History is history… hard to ignore it.

I can remember hearing an author making her case that WWII did not end the Great Depression, as was commonly assumed by almost everybody. What finally ended the depression was government actually withdrawing from the economy, or something like that.

It was interesting to listen to because it was so original and went so much against all the assumptions that are almost universally accepted as the common sense explanations.

cato.org/pubs/policy_report/v32n3/cp32n3-1.html

When, exactly did the government withdraw from the economy?

I was just commenting on the budget information that SamH put up. 104 billion in 1944 compared to 35 billion in 1948 indicates a substantial withdrawal from the economy in those 4 years, does it not?

Logic like that will get you nowhere. Just like pointing out how the Mashall Plan was a drain on the economy (under any economic model) not a furthering Keynesian ideas.

Agreed. But knowing how to read it appears to be an issue.

The “Great Depression” didn’t become “Great” until Hoover began to intervene in the economy in 1930. The more he delved into it the worse it got. Unemployment in 1930 was 8.5%; it jumped to 23.6 in 1932. Roosevelt intervened even more - unemployment leveled off at 19%. In 1939 the warring powers in Europe began to demand US built goods and unemployment began to drop - imagine that – free trade and private production ended what the government couldn’t.

Oh, well, if I were a Keynesian (which I am not) I would say that the theory states that after the initial influx of government funding in a fixed price economy (as during WWII), to prime the pump so to say, the economy will eventually, over many months, be able to sustain itself on its own with its own price adjustments (as happened after WWII) and with the influx of spending from those who benefited from the government influx of funding. Remember, job growth always lags economic recovery (aka a lagging indicator.) The problem was that we had many people return and in the country who had money to spend, and the wartime price restrictions were lifted. That resulted in inflation.

Eisenhower’s views insisted that the government attempt to promote economic growth. The basic principal of his administration was fiscal responsibility; that is, the government has a duty to stimulate economic growth and raise productivity without benefiting any one special interest. By the end of 1953, Eisenhower faced a lagging economy as a result of the Korean armistice’s sharp military cutbacks. A mild recession reached its peak in January 1954 with unemployment rates topping out over 6 percent. His first order of business was to ask Congress to curb the growth of federal spending. He insisted that the real issue at hand was the long-term security of the U.S.
There were a number of developments in the business sector in the capital markets and other financial intermediaries during the 1950’s. Over the decade the housing supply increased 27 percent and overall quality level of U.S. housing increased dramatically. A move from urban areas to the suburbs was the predominate characteristic of the new construction and increasing health and living conditions characterized the urban growth.

Growth in the economy also led to increasing popularity of other financial intermediaries. Life insurance companies flourished for the first half of the decade and a large number of private firms entered the market to absorb the excesses of personal savings. With surges in the economy, the 1950’s are often recognized as the decade that eliminated poverty for the great majority of Americans. By 1955, the country had pulled out of the previous year’s recession and gross national product (GNP) was growing at a rate of 7.6 percent. The boom was so great that the budget for 1956 predicted a surplus of 4.1 million.

The economy turned sharply downward in the summer of 1957 and reached its low point in the spring of 1958. Industrial production fell 14 percent, corporate profits plummeted 25 percent and unemployment rose to 7.5 percent. President Eisenhower did little to stimulate the economy because he worried more about inflation and not unemployment. Subsequently, in 1959 the economy realized $12 billion deficit, a new record for a budget shortfall during peacetime.

elcoushistory.tripod.com/economics1950.html

One of the problems today is that we don’t have real fixed pricing, if we did, Keynesians believe, Obama’s influx of revenue would have had a more dramatic effect.

Throwing money at the economy is inflationary, so is employing all your population. High employment produces inflation. The so called Phillips Curve.
econlib.org/library/Enc/art/lfHendersonCEE2_figure_036.jpg

Then again, “In the long run, we are all dead" – Keynes

Miltary spending actually INCREASED in 1953 instead of lagging as the author claims.

Neat story except its not true.

US spending 1952 259 billion Military spending 51.7 billion

US spending 1953 266 billion military spending 56.9 billion

US spending 1954 $270.8 billion military spending $52.8 billion

US spending 1955 $274.4 billion military spending $47.2 billion

US spending 1956 $272.7 billion military spending $47.1 billion

US spending 1957 $272.3 billion military spending $51.3 billion

US spending 1958 $279.7 billion military spending $51.8 billion

US spending 1959 $287.5 billion military spending $54 billion

Contrary to the “lagging” military spending in 1953 - it was actually up from 1952 and 1951. Overall government spending was also increasing 3 to 5 percent every year.

One of the problems today is that we don’t have real fixed pricing, if we did, Keynesians believe, Obama’s influx of revenue would have had a more dramatic effect.

How would price fixing help the Obama plan? According to the government there is very little inflation.

Keynesian believe that in a fixed price economy (and everything else being equal), cash inserted by the government will result, eventually, in more jobs.

Here’s your drop:

Defense budget in 2002 dollars:

1951 57.8
1952 67.5
1953 56.9
1954 38.7
1955 32.9
fpc.state.gov/documents/organization/9665.pdf

I gues it depends on the source and real dollars vs 2002 dollars. But why did the economy not spiral into a depression with the massive defense cuts in 1954 - 1955? Instead the country recovered and boomed - the opposite of the Keynesian theory.

Keynesian theory is rather lame, and dated. It seems tied to socialism.

It makes more sense to leave capital in the economy where individual entrepreneurs can look for every nook and cranny to invest and thereby improve products and services.

Large chunks of money held by a single entity, like the government, results in a more myopic distribution of capital. It is less efficient at finding all the opportunities for good investment. In fact, it makes rather bad investments on a regular basis. Over the long term, this results in a drag on the economy.

When government spending is reduced, the drag is lifted, and the economy leaps forward.

If I am not mistaken, the economy was already doing comparatively well, and when the economy is doing well, the proportion of the economy occupied by the state is smaller, so its reduction doesn’t have nearly the effect of a sudden steep reduction in government spending during bad economic times, when state spending is a much higher proportion of the economy. Everyone pretty much agrees, Keynesians and classicals alike, that the best time to reduce spending or to tacke the debt is during the booms, when the money to spare is available. Of course, when the boom comes (and I’m sure this will be the case once the economy is foing well agains), everyone forgets about the debt, nobody wants to start paying it off when things are going well 'cause it dampens the high. And so the cycle repeats itself.

As what happened after WW2 when the economy boomed instead of failing as predicted by the followers of the Keynesian theory.

In 1945 and 1946 Congress repealed the excess-profits tax, cut the corporate tax to a maximum, and cut the top income tax rate.

It is important to note that the post-war boom was one of the greatest historic verifications Austrians could wish for. Keynesians predicted that once war spending ended, aggregate demand would fall short and there would be a depression. But actually 1946 was like one of the best years ever. That the post-war era saw a 30-year boom rather than a drawn-out slump really shows that Austrians were right.

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