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Title: Usually a job engine, localities slow US economy (467K govt. jobs gone)
Source: AJC
URL Source: http://www.ajc.com/business/usually-a-job-engine-968424.html
Published: Jun 6, 2011
Author: AP
Post Date: 2011-06-06 11:13:29 by go65
Keywords: None
Views: 8441
Comments: 29

WASHINGTON — In a healthy economic recovery, states and localities start hiring, expand services and help fuel the nation's growth.

The U.S. economy is moving ahead, however fitfully. Yet state and local governments are still stuck in recession. Short of cash, they cut 30,000 jobs in May, the seventh straight month they've shed workers. Rather than add to U.S. economic growth, they're subtracting from it.

And ordinary Americans are feeling it — from reduced services to fewer teachers, police officers and firefighters.

The Great Recession officially ended two years ago this month. By the same point during previous recoveries, state and local governments were engines of growth: In the two years after the 1990-91 recession ended, for example, they'd added 430,000 jobs. At the same point after the 2001 recession ended, they had added 249,000.

This time is different. More than 467,000 state and local government jobs have vanished since the recession officially ended in June 2009, including 188,000 in schools.

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Begin Trace Mode for Comment # 11.

#2. To: go65 (#0)

WASHINGTON — In a healthy economic recovery, states and localities start hiring, expand services and help fuel the nation's growth.

WRONG.

Government spending takes capital away from the market-place, stifling continued growth.

When you fail on the first sentence, the rest of the article is sure to be equally flawed.

Capitalist Eric  posted on  2011-06-06   12:02:07 ET  Reply   Untrace   Trace   Private Reply  


#3. To: Capitalist Eric (#2) (Edited)

Government spending takes capital away from the market-place...

What is the government "spending" money on?

war  posted on  2011-06-06   12:03:45 ET  Reply   Untrace   Trace   Private Reply  


#4. To: war (#3)

From the article:

...states and localities start hiring, expand services...

What, your lips too tired to read this morning?

Capitalist Eric  posted on  2011-06-06   12:12:50 ET  Reply   Untrace   Trace   Private Reply  


#5. To: Capitalist Eric (#4)

...states and localities start hiring, expand services...

So they actually spend the money...it doesn't disappear.

Are jobs part of the market place in your world? Services?

war  posted on  2011-06-06   12:24:53 ET  Reply   Untrace   Trace   Private Reply  


#6. To: war (#5)

So they actually spend the money...it doesn't disappear.

Are jobs part of the market place in your world? Services?

The current GDP calculation model is as follows:

GDP = private consumption + gross investment + government spending + (exports h2; imports), or Y = C + I + G + (X h2; M)

Unfortunately, the model is grossly flawed. Government spending, or G, assume 100% efficiency. That is, every dollar that is spent (which is of course, taxed from the rest of the factors), is exclusively used to productive purposes. That is, it isn't wasted.

Since we know government DOES waste money, as government spends more, it ends up being a drag on the economy.

If government spending increases not as a function of tax receipts, then it can only come through creating more money (digitally, or through the use of the printing press). In this case, GPD would go up, but so would inflation, as a natural result. Of course, we're seeing this right now, as "Helicopter Ben" Bernanke and his fellow-Keynesian dimwits print the dollar into oblivion, and the GDP keeps from going TOO negative (without QE 1&2, the truth would already be obvious).

Capitalist Eric  posted on  2011-06-06   12:39:59 ET  Reply   Untrace   Trace   Private Reply  


#8. To: Capitalist Eric (#6)

Government spending, or G, assume 100% efficiency.

GDP doesn't measure efficiency. What it measures is the value of the output less inflation.

Productivity measures efficiency.

Your analysis is spurious and specious.

If government spending increases not as a function of tax receipts, then it can only come through creating more money (digitally, or through the use of the printing press). In this case, GPD would go up, but so would inflation, as a natural result.

Inflation is too many dollars chasing too few goods. When the aggregate total of dollars available does not equal the demand for dollars that are needed to purchase goods and services, dollars are TOO FEW and thus "creating" dollars is not inflationary.

war  posted on  2011-06-06   12:51:20 ET  Reply   Untrace   Trace   Private Reply  


#10. To: war (#8)

GDP doesn't measure efficiency.

I never said it does. My point- which you conveniently sidestepped- is "Government spending, or G, assume 100% efficiency."

Of course, you're using Rule of Disinformation #4: Use a straw man. Find or create a seeming element of your opponent’s argument which you can easily knock down to make yourself look good and the opponent to look bad. Either make up an issue you may safely imply exists based on your interpretation of the opponent/opponent arguments/situation, or select the weakest aspect of the weakest charges. Amplify their significance and destroy them in a way which appears to debunk all the charges, real and fabricated alike, while actually avoiding discussion of the real issues.

What it measures is the value of the output less inflation.

Actually, it's much more than that. From investopedia: The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. Usually, GDP is expressed as a comparison to the previous quarter or year. For example, if the year-to-year GDP is up 3%, this is thought to mean that the economy has grown by 3% over the last year.

Productivity measures efficiency.

Again, you're not telling the whole truth. Again from investopedia: Productivity- An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories. Productivity measures may be examined collectively (across the whole economy) or viewed industry by industry to examine trends in labor growth, wage levels and technological improvement.

Your analysis is spurious and specious.

Classic summary for a Straw-Man Argument. You really should try stand-up comedy- you're very funny, in an unintentional way.

Inflation is too many dollars chasing too few goods.

Again, you're only telling HALF the truth. From http://www.econlib.org/library/Enc/Inflation.html,

Causes of Inflation In a nutshell, inflation occurs—that is, the purchasing power of the dollar shrinks—to the extent that the nominal supply of dollars grows faster than the real demand to hold dollars. A standard approach to analyzing the connection between the money supply (M) and the general price level (P) uses an accounting identity called the “equation of exchange”:

MV = Py

where V denotes the income-velocity of money (the number of times per year the average dollar turns over in transactions for final goods and services), and y denotes the economy’s real income (as measured, e.g., by real GDP). Because V is defined as Py/M, the ratio of nominal income to money balances, the equation follows. The quantity theory of money (a better name would be “the quantity-of- money theory of the price level”) says that a higher or lower level of M does not cause any permanent change in y or desired V—or, in other words, does not permanently affect the real demand to hold money. It follows that, in the long run, a larger M means a proportionally higher P. In less formal terms, putting more dollars in circulation dilutes the purchasing power of each dollar; or: prices rise when there are more dollars chasing the same amount of goods.

So, there are more $ chasing too few goods, when the government PRINTS more.

When the aggregate total
[SIC] of dollars available does not equal the demand for dollars that are needed to purchase goods and services, dollars are TOO FEW and thus "creating" dollars is not inflationary.

Wrong, wrong, WRONG. In the market-place (absent government interference) the total number of dollars ALWAYS equals the demand for dollars, dummy. The supply of dollars equals the amount of dollars demanded, plus the interest assigned to those dollars. Creating more dollars than the market demands (by surpressing interests rates to absurdly low levels, for example) leads to increased risk-taking, asset bubbles (can you say "housing bubble?"), the dot-com bust, etc., etc. You can thank "Helicopter Ben" and Alan Greenspan for these latest examples.

Oh, and thanks for reverting to the rules of disinformation. I knew you wouldn't be able to have an honest discussion about my favorite subject.

Capitalist Eric  posted on  2011-06-06   14:53:19 ET  Reply   Untrace   Trace   Private Reply  


#11. To: Capitalist Eric (#10) (Edited)

WAR: GDP doesn't measure efficiency.

ERICA: I never said it does.

Yes you did.

This is what you wrote:

The current GDP calculation model is as follows:

GDP = private consumption + gross investment + government spending + (exports h2; imports), or Y = C + I + G + (X h2; M)

Unfortunately, the model is grossly flawed.

~~~~~~~~~~~~~~~

You go on to state that the model is flawed because of the "efficiency" assumption it makes about government spending. It doesn't care about efficiency in any aspect of its calculations. It's simply the dollar value of all output less inflation.

war  posted on  2011-06-06   14:58:07 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 11.

#13. To: war (#11)

You go on to state that the model is flawed because of the "efficiency" assumption it makes about government spending. It doesn't care about efficiency in any aspect of its calculations. It's simply the dollar value of all output less inflation.

Aha. I see your point.

You're using the following:

Rule of Disinformation #9. Play Dumb. No matter what evidence or logical argument is offered, avoid discussing issues with denial they have any credibility, make any sense, provide any proof, contain or make a point, have logic, or support a conclusion. Mix well for maximum effect.

Rule of Disinformation #13. Alice in Wonderland Logic. Avoid discussion of the issues by reasoning backwards with an apparent deductive logic in a way that forbears any actual material fact.

Rule of Disinformation #17. Change the subject. Usually in connection with one of the other ploys listed here, find a way to side-track the discussion with abrasive or controversial comments in hopes of turning attention to a new, more manageable topic. This works especially well with companions who can “argue” with you over the new topic and polarize the discussion arena in order to avoid discussing more key issues.

Rule of Disinformation #19. Ignore proof presented, demand impossible proofs. This is perhaps a variant of the “play dumb” rule. Regardless of what material may be presented by an opponent in public forums, claim the material irrelevant and demand proof that is impossible for the opponent to come by (it may exist, but not be at his disposal, or it may be something which is known to be safely destroyed or withheld, such as a murder weapon). In order to completely avoid discussing issues may require you to categorically deny and be critical of media or books as valid sources, deny that witnesses are acceptable, or even deny that statements made by government or other authorities have any meaning or relevance.

Rule of Disinformation #20. False evidence. Whenever possible, introduce new facts or clues designed and manufactured to conflict with opponent presentations as useful tools to neutralize sensitive issues or impede resolution. This works best when the crime was designed with contingencies for the purpose, and the facts cannot be easily separated from the fabrications.

Your playbook is old news, moron.

Capitalist Eric  posted on  2011-06-06 15:07:58 ET  Reply   Untrace   Trace   Private Reply  


End Trace Mode for Comment # 11.

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