## What U.S. Economic Recovery? Five Destructive Myths

 Quote by rhody And let's not forget the youth-unemployment crisis. There's now a generation of young workers who are in danger of being permanently sidetracked in the labor markets and disconnected from society.
I don't know how it is in your community, but in mine (Northern California) it appears that high school students choose their courses so as to avoid any possible course that might give them a marketable skill. Mathematics, the hard sciences, and English composition are all ignored to concentrate on soft sciences and the arts--not because the students have any real interest in these subjects, but simply because they are less demanding. This does not bode well for their future, but they seem oblivious to that correlation.

Yet another piece that claims the stimulus was not a failure insofar as it wasn't enough.

 Even some Republican economists and Nobel laureates like Paul Krugman argued that it was too small. Republican economist Mark Zandi, who advised John McCain on economic issues, when asked about the stimulus said, "I think we'd be in a measurably worse place if not for the stimulus. If we had not had the stimulus,.we'd have fewer jobs today than we actually have." Zandi was responding to when John Boehner contented that stimulus spending "has gotten us nowhere." Asked whether he agreed with Boehner, Zandi said "no." "Without the stimulus spending instead of a 9.5% unemployment rate, we'd have an 11.5 % unemployment rate" Zandi insisted. This is a Republican economic advisor, who, regardless of his politics understands modern economics – this is not Rush Limbaugh or Sean Hannity commenting.

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 Quote by klimatos I don't know how it is in your community, but in mine (Northern California) it appears that high school students choose their courses so as to avoid any possible course that might give them a marketable skill. Mathematics, the hard sciences, and English composition are all ignored to concentrate on soft sciences and the arts--not because the students have any real interest in these subjects, but simply because they are less demanding. This does not bode well for their future, but they seem oblivious to that correlation.
klimatos,

I have seen the same here and it continues into college. I have a daughter who graduated last year and I was astounded to see the numbers of students coming out with computer science degrees, math, etc... It was about 80% less in the "hard science disciplines" than when I attended. Your assessment is consistent with mine and IMO does not bode well for the future of our country.

Rhody...
 Worse here in Spain: 36% of young people never finish high school at all. Guess they were thinking they could make bucks in the now vanished construction industry. Good luck now. @daveb: Few seem to understand aggregate demand and the multiplier effect, the rest seem to find denying reality altogether a nice contact sport. Probably same group who took basket weaving and motorcycle appreciation courses in high school.

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Quote by daveb
Yet another piece that claims the stimulus was not a failure insofar as it wasn't enough.
 ...Even some Republican economists and Nobel laureates like Paul Krugman argued that it was too small. Republican economist Mark Zandi,...
Yet another Zandi/Krugman rehash maybe. Mark Zandi is not a 'Republican economist'. He freely acknowledges being a registered Democrat, holds markedly liberal views, is a strong Keynesian. He was indeed on contract to deliver some basic econ data to the McCain campaign, but not policy advice. That's enough to give reporters leave to cite him as a Republican economist, giving the appearance of 'balance' to story on economics after putting in a hysterical Krugman blurb.
http://www.commentarymagazine.com/ar...oner-of-zandi/

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There is a large and growing list of literature from working economists that suggest fiscal stimulus is ineffective.

New Keynesian versus Old Keynesian Government Spending Multipliers
John F. Cogan, Tobias Cwik, John B. Taylor, Volker Wieland*
Journal of Economic Dynamics and Control, February 2009
Informal summary
 Quote by Wieland, University of Frankfurt ...Our analysis suggests government spending quickly crowds out private consumption and investment, because forward-looking households and firms will consider eventual increases in future taxes, government debt, and interest rates...

An Empirical Analysis of the Revival of Fiscal Activism in the 2000s
 Quote by Taylor, Stanford Conclusion In sum, this empirical examination of the direct effects of the three countercyclical stimulus packages of the 2000s indicates that they did not have a positive effect on consumption and government purchases, and thus did not counter the decline in investment during the recessions as the basic Keynesian textbook model would suggest. Individuals and families largely saved the transfers and tax rebates. The federal government increased purchases, but by only an immaterial amount. State and local governments used the stimulus grants to reduce their net borrowing (largely by acquiring more financial assets) rather than to increase expenditures, and they shifted expenditures away from purchases toward transfers.

Fiscal Stimulus, Fiscal Inflation, or Fiscal Fallacies?
 Quote by Cochrane, University of Chicago The central question is whether fiscal stimulus can do anything to raise the level of output. The question is not whether the “multiplier” exceeds one – whether deficit spending raises output by more than the value of that spending. The baseline question is whether the multiplier exceeds zero.

Some 'Keynesian' criticism is not very new:
 Quote by John M. Keynes, 1942 Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle.
 Recognitions: Gold Member Finally, some potential good news to home owners who are attempting to sell in a troubled economy, something to think about. I have to admit, this is creative. How to sell your house in a rent-to-own deal Rhody...
 How does this man have time for world travel, what is the purpose and what does it cost? After reading this I thought of the old term "the blind leading the blind". http://news.yahoo.com/geithner-us-no...103020729.html "WROCLAW, Poland (AP) — U.S. Treasury Secretary Timothy Geithner has told eurozone finance officials the U.S. is not trying to lecture them on their debt crisis." While he's not trying to lecture them - he might have some advice?http://news.yahoo.com/geithner-urge-...154859873.html "Euro zone leaders agreed in July to give the 440 billion euro ($601 billion) European Financial Stability Facility (EFSF) the right to intervene on bond markets, extend credit lines to governments and fund the recapitalization of banks. Geithner will take part in an informal meeting of EU finance ministers on a one-day trip to the Polish city of Wroclaw on Friday, amid growing U.S. concern over the single currency bloc's inability to put an end to the sovereign debt crisis. He is likely to tell the ministers that they should consider increasing the size of the EFSF to equip it better for the needs of potential bank recapitalization. "He will probably tell Germany to give up its resistance to an increase in the size of the EFSF," the source said. A well connected fund source told Reuters Geithner had been pushing for a solution for European banks along the lines of the TARP program in the United States, but had not made much headway." Recognitions: Gold Member This story puts a human face on a Greece's slow economic downward spiral, Greek Crisis Exacts the Cruelest Toll An honorable hard working man turned to desparation through no direct fault of his own. I had never heard of this technique used by banks (domestic or as is the case here foreign) before either, at least not till reading this story:  Small businesses struggled with cash shortages because they had to pay their overhead when due, but wait months for hard cash from customers. Mr. Petrakis managed the same way other small entrepreneurs did: To get money quickly, he took his customers' postdated checks to banks and sold them at a discount. If he had a check for €1,000 that couldn't be cashed for five months, a bank would give him €800 right away, then another €100 on the date the check became cashable, his lawyer, Aggelos Zervos, says. The bank would keep the remaining €100. Could a scenario like the one portayed in this article happen, here in the U.S. ? If so, why, and if not, why not ? Rhody...  Quote by rhody This story puts a human face on a Greece's slow economic downward spiral, Greek Crisis Exacts the Cruelest Toll An honorable hard working man turned to desparation through no direct fault of his own. I had never heard of this technique used by banks (domestic or as is the case here foreign) before either, at least not till reading this story: Could a scenario like the one portayed in this article happen, here in the U.S. ? If so, why, and if not, why not ? Rhody... Factoring is a common practice in the US. http://www.businessfinance.com/factoring-receivable.htm Smaller retail merchants use their merchant accounts. http://expressfinancing.americanexpr...rchant_-_Loans For individuals - there are "pay day" loans: http://www.advanceamerica.net/payday-loans Recognitions: Gold Member  Quote by rhody This story puts a human face on a Greece's slow economic downward spiral, ... Could a scenario like the one portayed in this article happen, here in the U.S. ? If so, why, and if not, why not ? Rhody... Could happen, and does, everywhere: see credit cards. That's a ~20% loan the bank gave the guy. Recognitions: Gold Member  Quote by rhody This story puts a human face on a Greece's slow economic downward spiral, Greek Crisis Exacts the Cruelest Toll An honorable hard working man turned to desparation through no direct fault of his own. ... Greece's government and protected bureaucracy is where my anger goes with this story. Same WSJ issue: Why Greece Won't Reform Over the past year the government hasn't laid off a single civil servant.  Quote by WSJ, Takis Michas "The present government has done absolutely nothing during the last 12 months to speed up privatizations, reduce the public sector or open up closed professions," Athanasios Papandropoulos, a leading economic analyst, told me recently in an interview. "In these 12 months it has not fired even one civil servant. The only thing it is doing is trying to tax the private sector out of existence. ... "Whereas more than 1,000 Greeks were losing their jobs in the private sector every day in August, the government was assuring civil servants with lifetime tenure that their job privileges were not in danger."  Recognitions: Gold Member A ray of hope for young college graduates who choose to be in the following fields: Finance, Medical Assistant, Network Administration. 3 College Majors That Can Get You Hired Right Away For graduates in these fields who have had no luck finding jobs, here is your chance to debunk this article. Rhody... Recognitions: Science Advisor  Quote by rhody Could a scenario like the one portayed in this article happen, here in the U.S. ? If so, why, and if not, why not ? The part of the story that you quoted about discounting (or factoring) bills has been a standard (and perfectly respectable) business practice for hundreds of years, except that normally when you "sell" the bill to the factoring company or discount house (the bank, in your quote) they take over the responsibility of collecting the debt directly from your customer, and they also take the risk that they can't collect it. The 10% discount on the bill is your "insurance payment" for transferring the risk to them. Financial fraud isn't a new invention, either. Recognitions: Gold Member Starbucks wants$5 more, to create U.S. jobs
 Starting Nov. 1, Starbucks will collect donations of $5 or more from customers to stimulate U.S. job growth through its "Jobs for USA" program. The Seattle-based coffee chain is collaborating with the Opportunity Finance Network, a nonprofit that works with nearly 200 community development financial institutions to provide loans to small businesses and community groups. Starbucks says 100% of donations will go toward loans for companies and organizations that can add jobs or stem job losses. For any contribution 100% voluntary, I am all for. I have a problem when the government, state, local, or federal mandates a tax or fee and you have no choice but to pay it. Rhody...  Quote by rhody Starbucks wants$5 more, to create U.S. jobs For any contribution 100% voluntary, I am all for. I have a problem when the government, state, local, or federal mandates a tax or fee and you have no choice but to pay it. Rhody...
I agree, the government forces us to pay too many taxes that we don't want. I think of it like the greatest racketeering scam ever. Pay up or go to jail. However, I admit that the government also does a fair amount of good, too, with the money it collects(and doesn't waste). But I still don't want to pay for some taxes that I don't even want the effects of. I suppose it's hypocritical to say this before I even get a first job(I'm beginning to resent the world from my frustration), so I can't really say I pay too many taxes myself.

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Wow,

North Dakota isn't feeling the slump
 This state epitomizes a problem the Obama administration may face even if it is able to turn the economy around by 2012: People have suffered in this recession, and even when back on their feet, they have long memories of what they lost along the way. and But Williams is losing his \$1-million home in Montana to foreclosure, and spent his first few months in North Dakota camped out in a tiny RV with his family, going to the bathroom in a bucket and living without running water. "We're starting over again at 60, and we're adaptable. But our hopes and dreams got washed by the wayside," he said, as he fed his grandsons carrots and potatoes in his kitchen, where he and his wife sleep on a foldout couch each night. Light bulbs hang from the ceiling near exposed sockets, and the yellow, peeling walls are stuffed with sacks of fiberglass for insulation.