A Few Facts on the Deficit

[Heracles 417]

The case has been made it is better to give the investment class the freedom they need to create jobs and expand the economy. Yet, obviously, they are no better equipped than politicians in general, to wisely spend their resources.

What has destroyed the system more than anything, was the New Deal, the notion we have to invest in the present, by borrowing from the future. Thank you, FDR! I can't wait for the last of the "Greatest" generation to take it's final breathe.

I tell you all, I live my life on a cash basis, run my business on net 30, and I breathe a lot easier, knowing that the money I am spending for both, I have already earned.

I don't know what business you are in because you have stayed mum on it but most corporations use credit to conduct business or expand. Why is this any different for the government? The most efficient government would be one run like a corporation. One with a goal of minimizing costs while improving service, increasing revenue and re-investing it back into the business to grow. This is what conservatives have implemented in AUS and the result of it speaks for itself. Not to mention, we literally put the country first.

The majority of economists concur that investing in America during the depression help get it out of the depression. In fact, the double dip occured because investments were cut back, due to similar cries about the government. When did the economy bounce back again? When the government borrowed and spent at unprecedented levels to fight WWII. Further propelled by the GI bill following WWII.

The problem is not spending, rather, where and what the money is spent or invested. No one is saying just give people money but investing in things like infrastructure or fixing Americans disgraceful infrastructure improves efficiency, modernizes the country and ultimately creates jobs and growth.

Edited July 27, 2010 by Heracles

[Mr. Big Dog 10,747]

The stimulus is a negative impact. You cannot spend money you do not have to stimulate the economy nor recover.

Yes you can. Read and learn:

A Keynesian Success Story - Germany's New Economic Miracle

[Mr. Big Dog 10,747]

Where did I say that?

Nowhere. After all, the response you quoted wasn't a response to anything you said.

[Heracles 417]

Yes you can. Read and learn:

A Keynesian Success Story - Germany's New Economic Miracle

• Germany
  
• Australia
  
• Canada
  
• China
  
• etc etc etc
  

The reason in part that Australia is one of few industrialized countries totally weathering the global financial storm, is due to proactive [alien concept to many here] intervention and stimulus into the economy.

Edited July 27, 2010 by Heracles

[I AM NOT THAT GUY 5,715]

I don't know what business you are in because you have stayed mum on it but most corporations use credit to conduct business or expand. Why is this any different for the government? The most efficient government would be one run like a corporation. One with a goal of minimizing costs while improving service, increasing revenue and re-investing it back into the business to grow. This is what conservatives have implemented in AUS and the result of it speaks for itself. Not to mention, we literally put the country first.

The majority of economists concur that investing in America during the depression help get it out of the depression. In fact, the double dip occured because investments were cut back, due to similar cries about the government. When did the economy bounce back again? When the government borrowed and spent at unprecedented levels to fight WWII. Further propelled by the GI bill following WWII.

The problem is not spending, rather, where and what the money is spent or invested. No one is saying just give people money but investing in things like infrastructure or fixing Americans disgraceful infrastructure improves efficiency, modernizes the country and ultimately creates jobs and growth.

Drink more Koolaid!

The successful business man is the one that can afford to pay in cash. Using credit means paying interest, and that is a dangerous trap too many aspiring small business owners fall into, and never get out of. Ever hear the phrase, "Credit rich, and cash poor"? Those are the folks that are closing their doors and looking for work at Walmart.

I run a small RV repair business in a resort area close to two major metropolitan areas. Most of my competition has died out over the last few years, but I am still surviving. I must be doing something right. I like to say I am well positioned for a recovery, if it ever happens.

BTW, I get two or three solicitations for small business loans every week. The money is out there if I was foolish enough to take it.

Edited July 27, 2010 by ##########

[Heracles 417]

Anyone every heard of any disease or problem solving itself by doing absolutely nothing? Perhaps the oil would stop flowing on its own. No, in fact, it just gets worse and requires even more work and money to fix it.

[Mr. Big Dog 10,747]

There is a difference between private spending and public spending, but it is all spending. The question is, do you think it is better for politicians to spend the money on what they think is important, i.e. creating more loyal constituents for the next election, or let the public decide how to spent their own money as individuals, on things like LCD TV's and game consoles.

I don't think that the choices you prsent here are valid. To make it very simple: How many miles of road have you built? And how many miles of road have you travelled on? There most certainly is a need for public spending and for steering a largely short-term oriented economy into a desired long-term direction - energy efficiency, etc.

Now, we can have a debate on whether public spending is enough of an investment or too much consumption. But even the latter - in an economy that's driven by domestic consumption - is worth entertaining in times like these.

[Heracles 417]

Drink more Koolaid!

The successful business man is the one that can afford to pay in cash. Using credit means paying interest, and that is a dangerous trap too many aspiring small business owners fall into, and never get out of. Ever hear the phrase, "Credit rich, and cash poor"? Those are the folks that are closing their doors and looking for work at Walmart.

I run a small RV repair business in a resort area close to two major metropolitan areas. Most of my competition has died out over the last few years, but I am still surviving. I must be doing something right. I like to say I am well positioned for a recovery, if it ever happens.

BTW, I get two or three solicitations for small business loans every week. The money is out there if I was foolish enough to take it.

Cash is king but when you have none, you have to take on some risk. ALDI is well known for their cash only expansions.

The biggest problem with small businesses is cash flow. In this sense, yes having no debt is the way to go; however, it also makes it harder and takes longer to expand. The critical mistake a lot of small businesses and people make is borrow heavily and assume the money will start rolling. When it doesn't, they are then left broke. However, borrowing $300K to build a SUV you have an order for, that you have sold for $400K, is good business.

[Mr. Big Dog 10,747]

The successful business man is the one that can afford to pay in cash. Using credit means paying interest, and that is a dangerous trap too many aspiring small business owners fall into, and never get out of.

I see. So there shouldn't be any concern to the business community when credit gets tight since it'll only have an impact on the bad businesses to begin with. It'll essentially weed out the bad and leave the good to thrive. The whole credit crunch debate is therefore all nonsense. It has no ill effect on good business. Is that what you're suggesting?

[Heracles 417]

I don't think that the choices you prsent here are valid. To make it very simple: How many miles of road have you built? And how many miles of road have you travelled on? There most certainly is a need for public spending and for steering a largely short-term oriented economy into a desired long-term direction - energy efficiency, etc.

Here is the reality. Road taxes and levies are significantly lower here. As a result, they are much more dangerous [represented by the high road-toll], cause more damage to your car and wear them out quicker. It's why I have had to replace four windshields versus none in AUS; in fact, I don't even know of anyone who has had to do so ever in AUS. Not only are the roads well maintained and safe but they are cleaned [swept] weekly. In the long run I save money by paying tax upfront to build and maintain roads, as they do in pretty much every other first world country outside the US. Google streetview covers South Africa, Now have a look at their roads and compare them to the US - it's bloody embarrassing actually.

[I AM NOT THAT GUY 5,715]

I don't think that the choices you prsent here are valid. To make it very simple: How many miles of road have you built? And how many miles of road have you travelled on? There most certainly is a need for public spending and for steering a largely short-term oriented economy into a desired long-term direction - energy efficiency, etc.

Now, we can have a debate on whether public spending is enough of an investment or too much consumption. But even the latter - in an economy that's driven by domestic consumption - is worth entertaining in times like these.

Quite a few, actually.

Not a good analogy, really, as those projects are paid for by the folks that use them, in the nature of a road tax, paid every time they buy fuel, and weight fees, at the time of registration. If only all programs were paid for by the end users as they use them, then we would not be in the situation we face today.

[JohnSmith2007 353]

Here is the reality. Road taxes and levies are significantly lower here. As a result, they are much more dangerous [represented by the high road-toll], cause more damage to your car and wear them out quicker. It's why I have had to replace four windshields versus none in AUS; in fact, I don't even know of anyone who has had to do so ever in AUS. Not only are the roads well maintained and safe but they are cleaned [swept] weekly. In the long run I save money by paying tax upfront to build and maintain roads, as they do in pretty much every other first world country outside the US. Google streetview covers South Africa, Now have a look at their roads and compare them to the US - it's bloody embarrassing actually.

You might want to factor in the fact that AUS does not have to contend with cold and snow. That is why our roads wear out so fast compared to AUS. Freezing weather and snow removal can kill a road very quickly.

[I AM NOT THAT GUY 5,715]

I see. So there shouldn't be any concern to the business community when credit gets tight since it'll only have an impact on the bad businesses to begin with. It'll essentially weed out the bad and leave the good to thrive. The whole credit crunch debate is therefore all nonsense. It has no ill effect on good business. Is that what you're suggesting?

Credit is not tight. Like I said, I turn down the credit offers two or three times a week. Cash is sitting on the sidelines. Investors are searching for safe investments, especially ones with government guarantees. But, none of the fish are biting. Nobody wants to play when they are not sure what the rules will be six months down the road.

[Mr. Big Dog 10,747]

Quite a few, actually.

Not a good analogy, really, as those projects are paid for by the folks that use them, in the nature of a road tax, paid every time they buy fuel, and weight fees, at the time of registration. If only all programs were paid for by the end users as they use them, then we would not be in the situation we face today.

There are public goods and services that are provided by the government (federal / state and local) to and paid for by the public. Whether you actually use them or not is another issue. Schools are a good example - you pay for them whether you have kids in them or not. The fire department is another. It's there for you if you need it but you pay for it even if you don't require their services. Or how about the military? I mean really, to sit there and say I only want to pay for what I use is quite ridiculous. Move to a place that doesn't have any government and hence no taxation for public goods and services you don't fancy. May I suggest Somalia? It's some paradise for the self-sufficient I hear.

Edited July 27, 2010 by Mr. Big Dog

[Mr. Big Dog 10,747]

You might want to factor in the fact that AUS does not have to contend with cold and snow. That is why our roads wear out so fast compared to AUS.

This get better every time you post. By your logic, the roads down here in Florida should be supreme. After all, there's no snow on them roads. Ever. Oh, and to spare you the trip, our roads suck.