I also think the recent German rail head on collision between a heavy freight and a medium speed regional passenger train shows the dangers (10 dead, 23 injured) of running on track without PTC (or its German equivalent PZB) track. The freight engineer ran two red signals and ignored a call from a dispatcher. The track in question is in the former East Germany, where PZB is not widely used except lines with a speed limit over 100 mph. PZB, the safety system, which was developed in Switzerland in the 1920s and 1930s, uses magnets to automatically stop trains if they cross warning signals.
C&NW, CA&E, MILW, CGW and IC fan
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Sam1 "It takes a dollar and turns it into two dollars." Have minored in economics at the undergraduate and graduate level, I am familiar with Keynes' arguments regarding the benefits of deficit spending during economic downturns. Economists differ widely on the impact of stimulus spending. Those on the left, some of whom are Noble Prize winners, argue that a federal dollar of deficit spending has a multiplier impact of $1.13 to more than $1.50, although I have never seen a prediction of turning a dollar into two dollars. Equally well credentialed (Noble Price) economists on the right argue that Keynesian economics is seriously flawed. Recently, the dean of one of the nation's premier business schools observed that the predictions of economists enhance the creditability of those of astrologers. Take your pick.
"It takes a dollar and turns it into two dollars."
Have minored in economics at the undergraduate and graduate level, I am familiar with Keynes' arguments regarding the benefits of deficit spending during economic downturns.
Economists differ widely on the impact of stimulus spending. Those on the left, some of whom are Noble Prize winners, argue that a federal dollar of deficit spending has a multiplier impact of $1.13 to more than $1.50, although I have never seen a prediction of turning a dollar into two dollars. Equally well credentialed (Noble Price) economists on the right argue that Keynesian economics is seriously flawed.
Recently, the dean of one of the nation's premier business schools observed that the predictions of economists enhance the creditability of those of astrologers. Take your pick.
Turning one dollar into two by spending was recently claimed by democrats to be the result of unemployment compensation.
You mention the people on the left promoting Keynesian economics. That is a natural alliance because government run stimulus grows government as a side effect of what it does to the economy. So it is not surprising that most leftists are Keynesians and vice versa.
However, our current stimulus spending is being done by borrowing money from the future production and prosperity of the private sector so it cannot possibly work as stimulus. With that kind of stimulus, all it does is grow government. As stimulus, it is a ruse.
Obviously, if it worked, we would have discovered a magic wealth-creating machine.
Bucyrus Sam1: "It takes a dollar and turns it into two dollars." Have minored in economics at the undergraduate and graduate level, I am familiar with Keynes' arguments regarding the benefits of deficit spending during economic downturns. Economists differ widely on the impact of stimulus spending. Those on the left, some of whom are Noble Prize winners, argue that a federal dollar of deficit spending has a multiplier impact of $1.13 to more than $1.50, although I have never seen a prediction of turning a dollar into two dollars. Equally well credentialed (Noble Price) economists on the right argue that Keynesian economics is seriously flawed. Recently, the dean of one of the nation's premier business schools observed that the predictions of economists enhance the creditability of those of astrologers. Take your pick. Turning one dollar into two by spending was recently claimed by democrats to be the result of unemployment compensation. You mention the people on the left promoting Keynesian economics. That is a natural alliance because government run stimulus grows government as a side effect of what it does to the economy. So it is not surprising that most leftists are Keynesians and vice versa. However, our current stimulus spending is being done by borrowing money from the future production and prosperity of the private sector so it cannot possibly work as stimulus. With that kind of stimulus, all it does is grow government. As stimulus, it is a ruse. Obviously, if it worked, we would have discovered a magic wealth-creating machine.
Sam1: "It takes a dollar and turns it into two dollars." Have minored in economics at the undergraduate and graduate level, I am familiar with Keynes' arguments regarding the benefits of deficit spending during economic downturns. Economists differ widely on the impact of stimulus spending. Those on the left, some of whom are Noble Prize winners, argue that a federal dollar of deficit spending has a multiplier impact of $1.13 to more than $1.50, although I have never seen a prediction of turning a dollar into two dollars. Equally well credentialed (Noble Price) economists on the right argue that Keynesian economics is seriously flawed. Recently, the dean of one of the nation's premier business schools observed that the predictions of economists enhance the creditability of those of astrologers. Take your pick.
It works by peak-shaving. You scrape some off the next peak to fill the current hole. It's a zero sum game but less painful overall. It's neither magic nor a complete waste. It's probably a bad idea to do it in the middle of a recovery, though. The problem with the gov't doing it is timing. By the time they realize they should be doing it and the money hits the economy, we're already on the way up. The "shovel ready" HSR project grants awarded a year ago are a good example.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
If the government had a supply of real money and pumped it into the economy as stimulus, I see no reason why it would not work. But when the government borrows from our future and gives it to us as stimulus, the business sector sees the stimulus money, but they also see a future tax increase to pay for it. So the latter cancels out the former.
But I do remember my economics professor telling us that the discovery of Keynesian stimulus has made recessions a thing of the past.
Perhaps the curtain rises again for Act II?
http://finance.yahoo.com/news/Obama-to-call-for-53B-for-apf-3597272009.html?x=0&sec=topStories&pos=7&asset=&ccode=
The trouble is that politicians have seized upon Keynes acceptance of deficits in bad times to justify deficits all the time, which is certainly not what Keynes advocated.
Falcon48 Bucyrus: Sam1: "It takes a dollar and turns it into two dollars." Have minored in economics at the undergraduate and graduate level, I am familiar with Keynes' arguments regarding the benefits of deficit spending during economic downturns. Economists differ widely on the impact of stimulus spending. Those on the left, some of whom are Noble Prize winners, argue that a federal dollar of deficit spending has a multiplier impact of $1.13 to more than $1.50, although I have never seen a prediction of turning a dollar into two dollars. Equally well credentialed (Noble Price) economists on the right argue that Keynesian economics is seriously flawed. Recently, the dean of one of the nation's premier business schools observed that the predictions of economists enhance the creditability of those of astrologers. Take your pick. Turning one dollar into two by spending was recently claimed by democrats to be the result of unemployment compensation. You mention the people on the left promoting Keynesian economics. That is a natural alliance because government run stimulus grows government as a side effect of what it does to the economy. So it is not surprising that most leftists are Keynesians and vice versa. However, our current stimulus spending is being done by borrowing money from the future production and prosperity of the private sector so it cannot possibly work as stimulus. With that kind of stimulus, all it does is grow government. As stimulus, it is a ruse. Obviously, if it worked, we would have discovered a magic wealth-creating machine. What people fail to understand about Keynes is that he was NOT an advocate of continuous deficit spending by the government. His view, essentially, was that government should have a balanced budget, but it should balanced over the course of a business cycle rather than over an arbitrary time period (like a year) that didn't have any correspondence with economic activity. In other words, when times were good, government should run surpluses. When times were bad, it's OK for government to run deficits, as long as it all balances out in the course of the business cycle. The trouble is that politicians have seized upon Keynes acceptance of deficits in bad times to justify deficits all the time, which is certainly not what Keynes advocated.
Bucyrus: Sam1: "It takes a dollar and turns it into two dollars." Have minored in economics at the undergraduate and graduate level, I am familiar with Keynes' arguments regarding the benefits of deficit spending during economic downturns. Economists differ widely on the impact of stimulus spending. Those on the left, some of whom are Noble Prize winners, argue that a federal dollar of deficit spending has a multiplier impact of $1.13 to more than $1.50, although I have never seen a prediction of turning a dollar into two dollars. Equally well credentialed (Noble Price) economists on the right argue that Keynesian economics is seriously flawed. Recently, the dean of one of the nation's premier business schools observed that the predictions of economists enhance the creditability of those of astrologers. Take your pick. Turning one dollar into two by spending was recently claimed by democrats to be the result of unemployment compensation. You mention the people on the left promoting Keynesian economics. That is a natural alliance because government run stimulus grows government as a side effect of what it does to the economy. So it is not surprising that most leftists are Keynesians and vice versa. However, our current stimulus spending is being done by borrowing money from the future production and prosperity of the private sector so it cannot possibly work as stimulus. With that kind of stimulus, all it does is grow government. As stimulus, it is a ruse. Obviously, if it worked, we would have discovered a magic wealth-creating machine.
What people fail to understand about Keynes is that he was NOT an advocate of continuous deficit spending by the government. His view, essentially, was that government should have a balanced budget, but it should balanced over the course of a business cycle rather than over an arbitrary time period (like a year) that didn't have any correspondence with economic activity. In other words, when times were good, government should run surpluses. When times were bad, it's OK for government to run deficits, as long as it all balances out in the course of the business cycle.
And the only President who in recent times "got it" was Bill Clinton. As the economy improved, he had budget surpluses; it only took his non-Keynsian successor one year to return to deficits.
If economists knew what they were talking about, they would be investors and not economists. Had a fellow from Cargill talk to a class a few years back. He talked about agricultural marketing and how prices were set. Determined 5% from the crop, 5% from the weather, 5% from the demand 5% from the availability of transportation and 90% by "market psychology". Even their math has some weaknesses.
Study economics all you want but it is not a science and should not be the basis for very questionable decisions to put the country in a deep debt.
Rail infrastructure is what created our economy in the 19th century. China has decided to follow that suit. We have decided to pour dollars into war.
schlimm And the only President who in recent times "got it" was Bill Clinton. As the economy improved, he had budget surpluses; it only took his non-Keynsian successor one year to return to deficits.
The Federal Government had a surplus (revenues exceeded expenditures) in 1998, 1999, 2000 and 2001. It was $69 billion (rounded) in 1998, $126 billion in 1999, $236 billion in 2000, and $128 billion in 2001. The surplus as a per cent of revenues was 4% in 1998, 7% in 1999, 12% in 2000, and 6% in 2001.
The operating budget, which excludes the Social Security and the Medicare Trust funds, as well as several smaller trust funds, had a surplus only in 1999 and 2000. For 1998 and 2001 it was in the red. The surplus in 99 and 00 is mostly attributable to the Social Security Surplus, i.e. Social Security has collected more in premiums than it has laid out in benefits since approximately 1984. However, this changed in 2010.
Expenditure data for the U.S. Government is available at the Office of Management and Budget. It goes back to 1789, although before 1900 it is a bit sketchy.
Perhaps it was an oversight, but you might want to show the numbers before WJC in Bush I and after in Bush II.
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