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I'm not against research but I call bull on your alleged 3.8/796 economic benefit.
Congress Should Help the U.S. by Reversing Its Recent History of Starving Basic Research
The $3.8-billion federal investment in the Human Genome Project between 1990 and 2003 added $796 billion to the economy, estimates Battelle Technology Partnership Practice. Economists have calculated that a third to a half of U.S. economic growth since World War II has come from basic research.
This is why recent spending trends are worrying. A growing share of U.S. research is funded by the private sector, whose money shifts around quickly based on short-term corporate needs and tends to focus on applied, rather than basic, research.
Government investment, in contrast, is considered crucial to the success of basic research because it is continuous. Yet it has generally declined for a decade as Congress has tried to squeeze budgets.
In 2013 cuts from congressionally mandated budget sequestration caused the largest reduction in federal R&D spending in 40 years, according to the American Association for the Advancement of Science.
Both political parties are to blame: federal science budgets declined during periods when Democrats controlled both chambers (2007–2011) and when Republicans did so (2005–2007).
http://www.scientificamerican.com/ar..._HLTH_20150127
I'm not against research but I call bull on your alleged 3.8/796 economic benefit.
call Battelle
I thank all of your for your responses. One other question. I've read that we're threatened with a deflationary spiral. What force or forces cause that in spite of the fact that a bunch of Monopoly money is being printed up? I thought that a bunch of funny money equals inflationary pressure?
the monopoly money goes to the financial sector, where it mostly stays, as casino chips (backed by taxpayers)
the demand from 99% is flat, down because their income is flat, or down, and they aren't confident about their future prospects.
Last edited by boutons_deux; 01-27-2015 at 09:52 PM.
Deflation happens because the economy contracts instead of expanding. Job losses, weak economic prospects, etc causes people to stop spending and opt to save instead, which in turn slows down the economy, causes companies not to make investments or take risks, etc. That causes people to save even more, companies shed jobs even more, and there you find yourself into the economy shrinking and a deflationary spiral.
To combat that, funny money is indeed used to "cause" a moderate amount of inflation. Basically, it's injecting enough money in the market such that there's moderate inflation instead of deflation, basically punishing people that are saving (they're not beating the inflation rate, so their savings depreciate) in order to cause them to put the money in the economy, which in turn gets the economy wheel going again.
That's the theory behind it anyways.
Still waiting for some front-loaded QE.
About 50 grand should do it.
You are talking about a very large economy with its own momentum. My gut says growth will slow, as it must given global conditions, but there is just too much cash sitting around in corporate coffers at this point. U.S. businesses have a lot of capital, and will be under some pressure to deploy it.
I don't see any QE being really needed, and the Fed tends to be more cautious than I am.
(edit)
YET.
Heh, always with the caveat...
US is in little danger of such. EU on the other hand, is much closer to it.
Think of the economy like a giant vector addition. Inflation is merely an increase in price. Can you think of an important good that has fallen in price recently? yeah, that one.
Balance that with the concept of "velocity of money" The more money changes hands in a given year, generally, the better the economy is doing. If everybody, except for the very richest, has more money to spend, odds are they will take the money they saved on gas, and buy other things. This mitigates the effect of that deflationary pressure.
This touches on one of the more ed Republican economic "theories", i.e. the "job creator" myth. "don't tax the job creators". This is a bunch of bull , because as wealth goes up, the propensity to spend any new dollar goes DOWN. A dollar sitting in a 20 year bond creates all of jobs after the first year. Shifting money from the poorest, to the wealthiest, which we have been doing for the last 20 years, is really putting a drag on overall growth.
Again, ed Republican economic theories are to blame. We have shifted government spending from the federal level, where most revenue comes from progressive taxes (i.e. income), to state and local level, where most taxes are regressive, i.e. property and sales taxes.
Only now the GOP has been handed the keys at the state level too. So we end up getting the ed "cut taxes, and revenues will grow" grabassery, a misapplication of the Laffer curve by people who know juuust enough about economics to be dangerous. Read up how that is working for Kansas, where they have put their policies in place with a vengeance.
This points to the last force on the economy that most rank and file GOP tend to be completely stupid about: Government spending. Government spending is a key component of economic growth. It is REQUIRED for economic growth. You CANNOT have a larger economy, or a larger population, without spending more on bridges or education, or a legal system for that mater.
Conservatives model of how the world works assumes that taxes disappear into a hole, to be wasted and never seen again. The point though, and the fatal flaw for this assumption, is that even a dollar that is almost 100% wasted, goes back out into the economy... it will be spent again, by SOMEBODY. Take, for example, a tool purchased that is never used. The government purchases it, pays SOME company for it. That company, in turn pays their people that dollar, and off it goes to the races.
In reality, very few federal dollars are deployed so wastefully. Social programs, despite the vitriolic diatribes, tend to produce a return to the economy GREATER than their cost. Unemployment insurance, for example. This goes back to the marginal propensity to spend, and the ability to keep people who lose jobs from defaulting on debts like mortgages, which have second order damages beyond that one person. When you start talking about federal funds given for early education, drug treatment, and so forth, the multiplier effect can be profound, on the order of 7 dollars economic benefit for each dollar spent by some studies of some programs. Some of it is wasted, but the overall cost to benefit of government spending to the economy as a whole is nowhere near the low figure that most conservatives seem to believe.
Personally, I think the conservative disconnect from reality tends to stem from the overall religiousness of the right. Once you start thinking that you don't need evidence to support a belief in one area, I think that tends to inhibit critical thinking when it comes to other areas.
ANYHOO, time to shower and get ready for work.
Summation: GOP control of a lot of government spending recently has indeed lowered/dampened government spending. This is having a mild drag on the economy. The slow down in new oil rig activity is another drag. To be perfectly fair to the conservative point of view... red tape is hindering things, but the red tape really holding small business back... isn't federal, generally. Think of all the licenses you need to start any given business. Those licenses aren't federal, and the fees you pay to get them, don't go to Washington. Just sayin'....
"conservative disconnect from reality tends to stem from the overall religiousness of the right"
nah, conservatives don't GAF about religious stuff, other than than to sucker Bible humpers, rednecks, evangelicals into voting Repug with God/abortion/guns/gays/Freedom! bull . Repugs as the party of God!
But conservatives have the same detachment from facts as religious freaks. With conservatives, their religion is an ideology of sociopathic bull and class warfare.
Last edited by boutons_deux; 01-28-2015 at 09:41 AM.
Homeowners in Poland Borrowed in Swiss Francs, and Now Pay Dearly
“I was frozen,” he said, seeing that the franc’s value had soared that day.
Like hundreds of thousands of other Eastern Europeans, Mr. Szczepaniak, 46, is paying off a mortgage he took out in Swiss francs, instead of his local currency, the zloty.
In an instant, his monthly payment rose by more than 20 percent
http://www.nytimes.com/2015/01/29/bu...s&emc=rss&_r=0
Same story with countries that buy oil sold in $US. The use their currency to buy $US to pay for the oil. A strengthening, strong US$ means their oil import bill goes up.
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