Obama: No more tax cuts, no negotiation on tax relief.

[Darth Wong]

How is that more dishonest than spending borrowed money and calling that "growth"?

You could say the same thing about a student or young man taking out loans in order to get an education, buy assets, or start a business. Surely there is risk of squandering it, but there is the possibility of proper investment of loaned money producing returns that covers the principle and the interest of the loan with profit to boot. There's the rub.

So the correct term would be "a possibility of long-term growth?"

Seriously, when you have a possibility of growth and a certainty of cost, it is highly dishonest to simply call that "growth". Especially when the magnitude of the growth is measured not by the potential of the asset, but by the size of the expenditure.

[CmdrWilkens]

How is that more dishonest than spending borrowed money and calling that "growth"?

You could say the same thing about a student or young man taking out loans in order to get an education, buy assets, or start a business. Surely there is risk of squandering it, but there is the possibility of proper investment of loaned money producing returns that covers the principle and the interest of the loan with profit to boot. There's the rub.

So the correct term would be "a possibility of long-term growth?"

Seriously, when you have a possibility of growth and a certainty of cost, it is highly dishonest to simply call that "growth". Especially when the magnitude of the growth is measured not by the potential of the asset, but by the size of the expenditure.

I think it would be short term results which may or may not result in long term gains. A student loan to get a degree still has measurable immediate results (i.e. the degree itself, the ability to spend money from whatever mid-level scheudle friendly job on consumer items, etc) however there is no garuntee those immedaite results will translate into long term gains. Government debt followed by expenditure puts the money somewhere, be it in to the hands of federal workers, into infrastructure projects, into basic research and development, or possibly executive office redecoration for the Secretary of the Interior. The money, however, is going from the bank so SOMEBODY, the quesiton is what happens then. The federal worker who is suddenly (or continuously) employed, the construction company that gets the project, the scientist whose grant is approved, or the interior designer who does the office redecoration...they all suddenly have money on hand which they would not have if the government hadn't spent it. If they do nothing other than save the money (or pay down their own debts) then yes it really doesn't provide a long term stimulus. However if they do expend that money on commercial goods (which otherwise would not have been bought) then they do help build the economy and lead to real growth.

If the first scenario happens then you would get a 1 year spike in the GDP (from government spending) followed by a drop the following year as that spending ceases and consumer spending/commercial investment hasn't picked up. In that case by year 2 or 3 after the action taken you would be able to see that there was in fact no net growth for the period after the stimulus. If the second scenario happens then year 2 or 3 you would expect to see consumer spending/commercial investment rise up so as to keep GDP flat (that is C and I replace the reduction in government spending) fall slightly or rise slightly based on how much new spending and investment you spur.

In other words in a purely short term world there is aumotatic "growth" which we won't be able to really evaluate until 2 or 3 years down the line when we have a growth trend to see how things are actually heading. just as economists weren't able to figure out (officially) until around November that we had been in a recession since the pervious December so too in this case we won't know for sure until after the fact.