Question of the morning

From Conn Carroll at The Foundry: “What Is the Spending Multiplier on a Pack of Condoms?”
The entire intellectual underpinning of President Barack Obama’s spending plan rests on the belief that certain types of government spending creates a “multiplier effect” which raises national income beyond the size of government’s initial spending increase. So, for example, Mark Zandi has concocted a table which purports to show that for every one dollar the government spends building “Infrastructure” GDP will grow by $1.59. There is also an entry on Zandi’s table for “General Aid to State Government” which Zandi knows for an absolute fact has a 1.36 spending multiplier. So if Obama’s stimulus plan bails out California’s spendthrift government, and Sacramento then spends that money buying condoms for Nancy Pelosi’s constituents, Mark Zandi wants us to believe that this entire transaction will increase GDP by $1.36 for every $1 in condoms Sacramento buys. Does anybody really believe this?
Again, the family planning issue is just one example of how the left is using the cover of the stimulus to advance their long-term goals of increasing the size of the federal government. The stimulus plan increases Washington’s control over spending on education, spending on health care, spending on the environment, and even spending on local law enforcement. As the Washington Post editorialized this weekend: “All of those ideas may have merit, but why do they belong in an emergency measure aimed to kick-start the economy?”
They don’t.
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Well one pack of 12 condoms could mean 12 customers for a prostitute. So that means at 20 dollars a “customer” that 240 dollars changes hands, which also stimulates the pimp industry and the illegal drug trade.
Why do they want to reduce the number of American citizens while at the same time importing millions of people that will not use birth control?
I think the stimulus package has two goals. Kick start the economy, and provide relief to those that are worst hit. I’d say the contraceptives work toward the second objective. Moreover, it’s a relatively cheap measure. It does not create any new spending, rather it streamlines a spending that already existed.
Oh and human trafficing, we can’t forget the huge boost this will be for the trade in Thai 14 year old girls. What would San Fransico do without that vital industry.
Well it depends on the TIME period you want to use to measure the result. Using the same logic over a period of about 233 years I can prove the greatest multiplier the world has ever witnessed was on the investment of BULLETS..
How exactly??? I mean how much of a hit to your budget can you condom supply really be?
These people will qualify for medicaid ANYWAY.
That’s a joke, right? You forgot the sarc tag.
Good question.
The answer could be that it is the ultimate example of the socialists’ self-loathing…with the bonus that by its being projected onto the rest of us, it includes us.
LMAO
LMAO
LMAO
Do you really believe that?
OMG
LMAO!
obama said it so it must be true because the ONE can not lie.
I almost managed to write that with a striaght face. ALMOST.
But the ONE is a liar.
Socky:
Do you believe that poster might merely/actually be lgm, our buffoon relief-supplier, with a new, secret identity?
This truly is an example of the real voodoo economics of the Left. America can win this ideological war against Socialism only when real thinkers rise to the occasion and hammer an intellectual stake once and for all through the heart of these marxist economic mythologies. We need more Madisons, Jeffersons, and Franklins.
Going to keep the cheap labor going in the Congo and Brazil working the rubber plantations.
You mean Speaker Pelosi has a vested interest in this legislation? Isn’t that an ethics violation?
sonofdy, you underestimate the economic multiplier effect of condoms on prostitution. “Client No. 9″ paid $4,300 for a roll in the sheets with Ashley Dupre.
You have to be extremely naive and deluded to think the “stimulus” is actually intended to do anything other than grow the Federal government and pass out pork and welfare checks.
Yes, lgm is dumb enough to claim he believes it does that, but so is any glassy-eyed Obamamoonie.
You’re exactly right about medicaid. However, before, they had to wait for the contraceptive to be approved before medicaid would pay for it. Under the bill, it would be automatically paid for without waiting for approval (like most medicaid spending). That’s all the bill does. It steamlines medicaid.
How does it help? If people are having financial problems, one of the last things I want them to scrap on is contraceptives. This is a relatively cheap measure that in the medium/long run could prevent major reprecussions of the recession.
HA HA HA HA
You said pelosi and ethics in the same post!!! Funny….
It’s seems directed right at one community, and with pot depensaries (6) now here in the valley, they are just having a good old time on our dime. maybe we should supply the wine also and complete the package.
Let the poor smoke 2 less packs of Marlboros, and buy their own damn condoms. If I have to buy my own, so can they. Anyone got a Marlboro I can borrow?
For me personally, the multiplier would be (at a minimum):
Dinner + Movie
Let’s say those 12 condoms are handed out to inner city high school kids. What does it take to get an inner-city high school girl in bed these days? A pack of smokes? A bottle of JD? Bling? Maybe the guy wants to look good for the ladies, so he goes out and buys new running shoes or something. Maybe there’s your multiplier.
The pill has been approved since the 1960′s condoms have been arround since roman times. Sounds like you have an issue with MEDICAID. Which BTW we will all be on if the ONE gets his way. (Thats basicaly what universal health care is)
Again nothing here stimulates the economy.
And potentially dangerous.
Sort of like putting matter and anti-matter in contact with one another.
Good thing pelosi and ethics weren’t in the same sentence!
How about motel rooms? Think about the economic benefits of government sponsored motel rooms.
Well then San Franisco and pelosi would be blown into the ocean.. Wait… hmmmm
Perhaps I was unclear. When I said “approved”, I meant the spending had to be approved. For example, you walk into a clinic and ask for a pill and want to use medicaid, you would have to wait a period of time before medicaid would approve the spending. Under the bill, you could just walk in and use medicaid to get the pill.
Gives “stimulating the economy” a whole new meaning…
Sadly, that most likely would not work.
Remember, the government couldn’t even make a profit on the Mustang Ranch brothel.
A brothel, for Crissake!
(Apologies….)
I don’t follow.
Again, sounds like you have a problem with medicaid.
Perhaps something that con be brought up when they try to put everyone on government run insurance?
Don’t know, but the multiplier of corporate jobs runs at about 3-5:1. So if 75,000 corporate types get laid off, then around 300,000 small business types will follow.
Makes the full impact of the layoffs this Monday slightly less than 500,000.
For every dollar borrowed by private enterprise the money multiplier will translate into $5.50.
GEEES! What idiots are running this country?
I agree with you that if private enterprise can fix things, we should let them. However, I think the problem is that private enterprise won’t do the necessary spending because they’re too worried about the economic outlook.
Didn’t think you would…not that you could…hiding behind the Obenevolent one.
Yes, but who is creating the fear?
OK. I am really confused now. How did we get from Fannie Mae and Freddie Mac to condoms? I don’t think our government is econ-savvy enough to get us out of this mess.
Oh, I think you do.
They’re on a socialist roll…with no end in sight.
If you don’t think there is an economic/financial crisis, it would be pointless to have a conversation with you.
To answer your question, though, I’d say the banks that have collapsed and the rising unemployment. That’s what’s creating the fear.
I honestly don’t.
What?!
Really??!?!
You don’t?
I’m shocked…shocked, I tell you!
Agree with you.
Excellent point…and the understatement of the millenia.
It might have something to do with a certian president screaming “If you don’t do what I want the economy will destroy itself!!!”
Just saying…
There’s definitely something to be said for that. But I’d still argue that there’s a plethora of (hard) evidence to suggest that we’re in for a tough time. The rhetoric is not necessary to make such a determination.
True, however it doesn’t help.
What do you mean?
FABULOUS QUESTION! does nan hve a trojan factory in the bay area?
NO
NO
NO
Investment is fundamentally an emotional response to news.
Ask yourself what would happen if Obama came on the news tonight and said he wanted the capital gains tax removed from the tax code.
You know damn well the stock market would gain 4,000 points overnight and banks would have confidence to lend money.
I think I understand your point. I’d agree that it doesn’t help the situation, unless such action is politically necessary to motivate action. Everything in politics is overstated, and this is no different. If it weren’t overstated, most people would just ignore it (perhaps you could argue this would be the better approach).
At the risk of being mocked with RAAAAACCIIIISSSTTTT tags…
“How much does it cost to get an inner-city high school girl in bed?”. That’s a little bit of a generalization, wouldn’t ya say?
I am reminded of the UN sending condoms over to Burma/Myanmar/whatever they’re calling it today.
At 73, I’ve seen so much of this nonsense it’s getting depressing. People who are the product of our “education” system believe whatever supports their minimal thinking. Thinking seems to be bothersome these days; it interferes with peoples 500 channel cable TV’s and other forms of entertainment. Thinking is also discouraged in so many areas; we are just programmed to be quiet consumers/voters etc. Logic is frowned upon. In the past we had a safe margin between ignorance and danger. Now, ignorance is putting us at great danger, as I’m afraid we will soon see.
I’d have to disagree with that premise. Investment is fundamentally a rational response to news. If the free market were fundamentally based on emotion, I’d be quite worried.
As to the capital gains tax, that might help with the recession, but I don’t think it would have much of an effect on the financial crisis. The credit markets are frozen more because of bad assets than because of a looming recession (although that doesn’t help).
slightly off track, i read on drudge that our poor illegal immigrants are now being targetted by our “i’d rather commit robbery than work” poor. so of course our government is pressuring banks to help the illegals set up bank accounts so they can not carry around so much cash. no mention of prosecuting the robbers, because the illegal thieves don’t tell the police, who ignore the employer thieves paying in cash to avoid taxes and all those pesky regulations, so the robbery thieves continue their life’s work, probably it’s only a part time job while waiting for the unemployment check or the welfare check anyway, but we need to pass a law to force banks to accept illegal cash and give them checks. WHAT A COUNTRY!
bluesoc
This is about leadership. Obama has the “bully pulpit”.
He could change the markets overnight if it didn’t interfere with his socialist agenda.
bluesoc
Where the hell did you get your education?
GEES!
I think that’s wishful thinking. The President may be powerful, but not that powerful. If it were that simple, you’d expect there to never be a recession when a Republican was in power (because their agenda is free market based).
And who is creating the news sport?
Since 1973, we have legally killed somewhere between 35 and 50 million Americans – I dont think anybody knows the real number.
WHASSAMATTER, NAN – NOT MOVING FAST ENOUGH FOR YA?
They will deny it but this is the liberal view of human life – it is a liability to government resources and to the planet itself.
So now we export death in the womb. Somehow, Ninevah comes to mind.
First off, I don’t appreciate the condescending use of “sport”.
However, I do not believe the high volume investors(the one’s who are the driving force behind our economy) get their financial news from MSNBC or even the NYT.
The Wallstreet journal is a fairly well respected news source for the financial types, and it is rather conservative.
You have a very simplistic view of the markets.
I don’t think the bill would finance/subsidize abortion. It was concerned with contraceptives (condoms, the pill, etc.)
bluesoc
Go back to school. Your hopeless.
You just stated that the President has the ability to stop a recession through his words alone. I think that is a little more simplistic.
ACORN’s community organizing and its pressuring banks to give risky loans and mortgages helped damage the economy, and yet they are potential beneficiaries of the bail out bill. “Isn’t it ironic…”
They could save money by not buying lottery tickets too. But then again, as long as they are buying smokes and lottery tickets, they are paying a tax of some sort.
They’re gonna distribute the rubbers to Border Patrol agents to hand out as our “undocumented guests” pour over the border for the other freebees.
It’s true – it doesnt, I was just trying to make a point. Contraception is a slower method of holding down the “surplus population”, to quote a movie line. Abortion speeds up the process.
Even if the $$$ for “family planning” is thrown under the bus, it’s worth noting that these programs (including education, local police, etc.) are none of the federal government’s business.
I’m completely lost by this logic. If it’s necessary – won’t it get spent?
And if it’s unnecessary – spending is a waste. So then am I to conclude, that you are for government waste?
Help me.
Good point.
I believe that line is straight out of Dickens’ book, and was used in the movie screenplay.
the real multiplier effect:
For every one special interest given a handout in the Crap Sandwich, ten more will demand their own bites .
Conserv…:
Stop trying to understand the socialist.
There is no logic there to understand.
Excellent!
Deserves a rimshot!!!
Actually Granite – I wasn’t really trying to understand. I was feeling a little need for entertainment and wanted to watch a head implode trying to give logic to the illogical.
That IS the reality. I began to become financially successful in the Carter years when the markets and financial news was far worse than it is now. The fundamentals of investment are that you AWAYS buy on bad news and sell on good news. Most people don’t do that. I saw the lack of confidence in the news and took advantage of it. People are sheep. They will ALWAYS look to their president for for assurance. Obama could provide that assurance if he would abandon his socialist viewpoint.
corona said:
LOL
I know. “Understood”. (Ouch!-sorry!)
Good posts-keep on keeping on.
By “necessary” I meant spending that would get us out of a recession (quickly). And no, private companies will not necessarily spend to that level because the benefits of the spending are not internalized. They are basing their decisions not on the economy as a whole, but on their own business.
Here’s a really simple example.
Company A could spend $10 dollars today that would get us out of a recession. Overall this would benefit the economy by $100 (because we’re no longer in a recession). However, if Company A will lose money on that spending (say $5) they will not do it.
Instead, the government could spend that $10. They’ll still lose $5, but overall the economy will be benefit by $95.
BTW this isn’t “socialism” economics.
bluesoc…but if company A didn’t need the item it’s a waste. If they did need the item, then guess what, they will spend.
Or let me give you a really simple example. Let’s just say what you said is true. Why should the government stop at $10 – why not spend $1000. Then the economy will benefit by $100,000. Why stop there – just keep going – how about spending a trillion. Oh come on – why stop there – how about a trillion each – then we’d each be worth 10 trillion? What’s wrong with that?
Further – have you ever studied history? Spending (borrowing) your way out of a financial mess, has never worked.
bluesoc needs to go back to school.
That is where bluesoc got its economics.
Trouble is – bluesoc far surpasses many of the masses. bluesoc even tried to use logic – something the masses completely ignore. To the masses, it’s all about feelings.
Ever try to balance your checkbook using feelings?
When I think Condoms and “Stimulus” at the same time, I’m rarely thinking about Economics.
In fact, some of my worst cases of “empty bank account-itis” have occurred when thoughts like condom and stimulus were rattling around inside my fevered mind…
I tried it in 1965. The phone company turned of my service.
FamilyMan – but if you were a lib, you’d have tried in 1966, 1967 and every year since. Just because it never worked before, is no reason to change course and actually try a different approach.
MISTERBEE241 (#60) thinks a lot like I do. He worries that the 40+ million abortions that have been done in our country will finally run out God’s patience with us. And that God will destroy our country like he planned to do with Nineveh–before they repented of their evil and changed their ways.
***
I think we may be closer to the Sodom and Gomorrah scenario–when God couldn’t find even a few non-evil hearted persons in the five cities and he destroyed them all.
***
I know an Episcopal priest who did some archeology work there–the destruction is still evident, and looked more like a nuke hit the place. There was far more destruction than any fire, war, or other disaster could do.
***
I think time may be running out for our country. I do not see how any good Christan (or Jew or Muslim) could support candidates who do not respect life.
***
John Bibb
Why stop anywhere? Let the government do everything/ sarc
I think time may be running out for our country. I do not see how any good Christan (or Jew or Muslim) could support candidates who do not respect life.
***
John Bibb
I agree with you, sir. Good Christians, Jews and Muslims do not support abortion.
I’m sure everybody would be happy to not actually play the super bowl game, just let the gov’t decide who wins and who loses. Since it’s good for sports, why not economics?
I’m not a religious man. There are many like me who conceder legal abortion the ultimate in socially destructive behavior.
Muslims just kill all the adult infidels. Their bloodthirst is equal.
I agree with you, too.
Except for some of the infidel women. They have other uses for them.
Totally agree – though I’m not 73
….
bluesoc: The problem is, businesses have to pay taxes, SS, FICA, unemployment, etc, etc. The morass of taxes is what weighs heavily on every business.
On top of that, Congress is continually changing our tax code making long-term planning difficult at best — for businesses and individual investors.
You want to see investment go up in this country? Give us the Fair Tax and then stand back!
http://www.fairtax.org/site/PageServer?pagename=about_main
The idea is that the gov’t only steps in when the markets are failing (which arguably is the case here). They should not spend the $1,000 if that money would be better spent by private companies. Of course, this is more difficult in practice than in theory. The government will likely want to spend more than it needs to (and that’s when voters need to act).
IF, however, (and it’s a big if) this is a situation where the private markets are failing, the stimulus package might be justified. If the government continues to spend after it is no longer justified, then it’s up to the voters to put better politicians in office.
The liberal controlled government is on quick time march towards controlling every single human in this country.
For exactly which candidate do you think those voters will cast a ballot? The one who tells them, “Things are tough, suck it up!” or, “You poor thing, have some government $$$”???