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I think a massive infusion of cash into society theoretically helps the economy, at least in the short term. But it is the long term effect where the potential for danger lies. Think of it like a credit card; once you get it you can pay off your other bills, but when you get the bill for the credit card itself you have a hard time paying and get burdened under accumulating interest.
Perhaps creating dependency on government payments is the goal rather than stimulating the economy. Also, would the currently unemployed actually work for something like the WPA?
That thought has crossed my mind as well. Making the people more dependent on the government makes government power grow. Also, I think that people would be willing to engage in physical labor if they were down enough on their luck and had much reduced access to government programs….in other words, more like the situation in Mexico than in the U.S.Another query: now that I think of it, what is stopping America from instituting another WPA?
….Another query: now that I think of it, what is stopping America from instituting another WPA?
In short the idea of entitlement… not to work but to be taken care of by the nanny state; most folks stop looking for work when they get a job.
….Another query: now that I think of it, what is stopping America from instituting another WPA?
In short the idea of entitlement… not to work but to be taken care of by the nanny state; most folks stop looking for work when they get a job.
DittoI have always hated it when government payments/payoffs are called entitlements. An entitlement is something you are owed, so people are owed or have a right to welfare payments that are essentially extorted from those citizens that work?
Having grown up being mentored by guys that were in the C's, (old Civilian conservation Corps) and went on to win WWII and build the America that is rapidly slipping away, I'm concerned. We could have programs like that and the WPA but the mindset of many people isn't, “give me a chance to make my own way” but “give me a handout”; the idea of equality expressed in our founding documents is really the equality of opportuninty… we all get an equal shot, and how we do, depends on us.
I am waiting for someone in congress to seriously propose reintroducing either the silver or gold standard as a way of guaranteeing the dollar's stability.
BINGO !
I am not holding my breath waiting for the reintroduction of the Gold Standard though. The Gold or Silver Standard would radically reduce the governments ability to finance deficit spending. Without deficit spending congress would be forced to reevaluate mnay spending programs and not just social spending. That is the main reason why after further thought, I have concluded that the Gold Standard is a pipe dream and will not happen. It probably needs to come back but politicians cannot stay in power without their bread and circuses, therefore it won't come back.
“Injecting additional money into the banking system is a pretty dangerous game right now, and the Fed cannot afford to press on the accelerator amid a potentially inflationary environment,” said Richard Yamarone, economist at Argus Research.
However Obama is pushing for continued infusion of cash into mortgage backed securities, that increases the risk of massive inflation, the bank lending rates are at an all time low 0-0.25% and credit cards and consumer loans should hold at 3.25% that means its time to slow down the purchases of bonds by the Fed. Its critical right now to stop spending but Obama is stubborn, I know he has no clue and listens to advisors that say what he wants to hear.
I am not convinced that the guys at the Fed really care about inflation right now. I hope we wont be seeing people take their paychecks home like this within a few years
I agree, your first job should happen long before you graduate from college. Keeps you out of trouble too. I always had a job, since age 12, paper route, babysitting something. That is immigrant work ethic, at least it was.
We know that unemployment during the Great Depression hit over 20%, so we're a long way off. But this chart (see below), from January 2009, should give some indication as to what the government says on one hand, and the way things are in reality on the other (with the stimulus, unemployment has hit 9.4%). By the government's own admission, the stimulus is doing worse for the economy than it would have been without it.
The big question is what about long-term effects? Stimulus now is going to cost us dearly in years to come because the stimulus is financed through borrowing and monetizing the national debt. The chicken has to come home to roost eventually. Does anyone really think that the debt will be paid down when the recession/depression ends? It is no different than people paying their mortgages with credit cards. It is throwing good money after bad. I don't know about everyone else, but my parents always told me that was stupid. What I would like is to see a little responsibility in government, I am not holding my breath for that either.
