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Maybe true in some countries, but not here in usa. The jobs the government creates when it spends money gives people an income who in turn pay taxes which gives the government more money so that it can create more jobs. The federal government gives a state $100 million to build a new bridge and the state must hire 50 people to do that job. Those 50 people get paid a salary which is taxable, and at the end of the year (for most people) the send some of that money back to the federal government in the form of taxes. Where in that scenerao do you see the government increasing everyone's taxes? Our taxes are lower now than they were 8 years ago.

Except that taxation and government spending is too inefficient.

Government does not collect taxes from all of the jobs it "creates", because some are low income jobs. And the bridge building jobsd are temporary. Also, unless an employee produces a salable product, he doesn't create any wealth.

The fallacy breaker is that YOU, with your untaxed salary, can buy more with the money you didn't pay in taxes than government can buy with the same money taken in taxes. The process of tax collection wastes a lot of money. And a lot of the reason you can buy more is that you don't have to pay for a purchasing department full of bureaucrats and putting purchases out on bids.

Your argument is the lie the liberals use when they say they can create jobs. So it qualifies as a world famous lie.

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but that is exactly the point. government is capable of creating jobs. therefore the sarcasm is false by virtue of the statement being true. look at germany before the second world war. while the rest of europe was in depression the national socialists created jobs.(i am no fan of hitler in case someone is going to say so.)

But they didn't really create lasting jobs. They used slave labor in the prison camps to generate the money to hire others.

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@ midimagic

lasting or non lasting jobs are not the point. the point is that if an economy is in recession then goverment spending is the most effective way of ending that reccesion.

consumers do not spend much money during a reccesion. that is the whole crux of a reccesion. because consumers stop buying the demad for goods and services falls. this leads to unemployment. because the now unemployed people does not have as much money to buy other sectors of the economy dont sell much either and this leads to further job losses.

these things actually happened in history. the best example is the great american deppresion of around the 1930 years.

the same thing happend around the same time in europe. only hitler' national socialists actually provided jobs and germany got pulled out of reccesion before almost all other europian countries.

guys we are hijacking nichito's thread again. perhaps we should create a new thread in which to discuss this topic. the same goes for homosexuality. there is a new thread already for that. it is the "lets talk about it...." thread.

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From some of what I've seen, the American Great Depression was caused by governmental mismanagement of a recession. Or, in other words, the government made it worse, not better.

Recovery began on paper with WW2, when the unemployment rate skyrocketed and paper earnings began to rise. The problem there is that unemployment jumped because the size of the military was increased (not a slur on the military, just pointing out a fact) and the paper wealth wasn't much use without a ready supply of goods to spend it on.

Full recovery began in the post-war era when production of civilian goods went back to near-normal levels and the paper wealth was rendered usable.

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@ enderx

i am sorry but you will have to be more specific. what exactly did the government do to make the recession worse? unless the government set out on a large campaign of public works then you are only proving our point which is that the great depression could have been less severe had the american government created jobs on a large scale by public works.

also i do not understand what you mean by "on paper" and precisely what is paper earnings.

you are also contradicting yourself. how can recovery begin when unemployment skyrocket? should it not be the other way around? that unemployment decreased or at the least leveled off when the recovery began?

and by the way. that is a common misconception. recovery began (although was not there completely yet) actually before america became actively involved with the war. check statstics which shows GDP and unemployment rate of america.

if anything the war put a strain on the american economy. by the time the war ened you could sell american consumers almost anything because they have been deprived of consumer goods.

and had the depression really ended with the start of the war then it would only strengthen my case since now government had been creating jobs by engaging industry to produce for the war effort.

as it was the war actually only finished off the great depression but then overstrained the american economy.

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But they didn't really create lasting jobs. They used slave labor in the prison camps to generate the money to hire others.

not all. i dont know how far your statement was true. it was certainly true during the war.

but even before the war started hitler set out on campaigns of public works. for example many unemployed were set to work with the clearing of forests.

germany's economy was under severe strain because of the treaty of versailes. inflation was a nightmare(strange during a depression.) but the public works was the one thing the national socialists did right that the rest of europe did not follow.

many people believe that government spending to ease a recession does at least as much harm as it does good. they say the same for taxation when the economy overstrain itself.

but this is a controversial issue. it is certainly not a good idea to resort to it for each and every minor problem. if i had been the minister of finance of any country i would only employ it during a real and serious recession. but i dont know if i would tax or spend less in order to ease inflation. there i simply dont know enough. i mean. would the higher inflation not increase the economy's ability to produce? (i.e. shift the long run aggregate supply curve to the right)

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off-topic... i guess i've seen a "Start New Thread" button somewhere out in the forum's menu...

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consumers do not spend much money during a reccesion. that is the whole crux of a reccesion. because consumers stop buying the demad for goods and services falls. this leads to unemployment. because the now unemployed people does not have as much money to buy other sectors of the economy dont sell much either and this leads to further job losses.

these things actually happened in history. the best example is the great american deppresion of around the 1930 years.

That's the deprecated Keynesian Economics spiel.

It has now been shown that the extended spending actually prolonged the depression until 1942. It took the wartime sacrifices to end it. But it could have been ended a lot earlier if the people controlling the Federal Reserve Board hadn't also been playing the stock market, and adjusting the money supply for their own profit.

A momentary surge in spending helps. An extended spend does the opposite.

the same thing happend around the same time in europe. only hitler' national socialists actually provided jobs and germany got pulled out of reccesion before almost all other europian countries.

Temporarily. They printed money which was not backed by anything, and then they enriched the German economy by stealing all of the property of the Jews. They also debased the Italian and Polish currency.

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They printed money which was not backed by anything

The money was backed by production capacity, which is the only real way money can be backed.

In fact the current economic system is as unstable as it is because the money supply isn't backed by production capacity.

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@ midimagic

you say that spending actually prolonged the depression.

i do not know about that. i admit that my knowledge is wanting. i will have to go find out and then i shall get back to you(pity you did not post a link :-)). but i do know that recovery of the american economy started before 1942. also i did point out that the war was more of a problem for the american economy than a help. but that was a problem because of the production limitations. there was not enough productive resources to both produce for the war and lavishly supply civilians with consumer goods.

by the way. i looked for stats for the american economy which goes back a couple of decades. but i could not find any. not even on the internet. so if anyone can point me in a direction i would appreciate it. (i took out an economics textbook which had stats on the US economy from a library but that was in another town.)

germany

true they did steal the jewish property but in an economic sense that does not lead to any economic growth. only to a transfer of ownership. look at what is happening in the zimbabwean economy right now. there too it started out with a large scale transfer of ownership (i.e. stealing the white owned farms) but it did not lead to economic growth. that is because it cannot. as for debasing the currency of poland and italy. you shall have to explain that to me.

one last note. currency in an economy is directly related to the productive capabilities of that economy. and if you multiply that currency with the number of times it is spend on goods and services(on average) you get gdp. if you increase money supply without there being a corresponding increase in goods and services(i.e. productive capacity) you get out of control inflation.

one last thing.

i think this is a really interresting discussion. you guys do of course realise that we are now trying to resolve what even the experts cant resolve. but if you guys want to continue this discussion( i know that i want ) then we should create a new thread. nichito is not going to appreciate we taking over his thread

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Spending didn't prolong the depression, deficit spending prolonged it.

Germany debased the currencies of these other countries by taking away the gold it was based on, and by causing the countries to print more money.

You are right that currency is based on economic production. Almost all wealth is created by work. This is why the government can't print as much money as it wants to, or spend as much as it wants to.

This is why the tax rate should be at 10 percent or below. Above that, government reduces the size of the economy. It's also why universal health insurance can't work.

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This is why the tax rate should be at 10 percent or below. Above that, government reduces the size of the economy. It's also why universal health insurance can't work.

I disagree about universal health care -- take France for example. Their tax rates are 25% higher than ours (maximum is 48%) yet they manage to pay for a universal health care program. Whether we really want one like that is a different discussion.

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off-topic... i guess i've seen a "Start New Thread" button somewhere out in the forum's menu...

Mmmm, sounds familiar..

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"You look gorgeous..." (mankind being lied to by mothers since the first mother, I believe :) )
"You won't feel a thing..." (dentists tricking kids since the profession came to be.)

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Girl posts pic of her self on Facebook
Other girls reply "God, your gourgeous!" "I wish i had your face" "I want you body" and so on...

This is common with girls on Facebook... believe me.

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"Promise me, you will never do that"

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